TIDMBVT
RNS Number : 5231H
Baronsmead Venture Trust PLC
03 December 2020
Baronsmead Venture Trust plc
Annual Report and Audited Financial Statements
for the year ended 30 September 2020
The Directors of Baronsmead Venture Trust plc are pleased to
announce the Annual financial report for the year ended 30
September 2020. Copies of the Annual financial report can be
obtained from the following website: www.baronsmeadvcts.co.uk
Financial Highlights
-- Net Asset Value ("NAV") total return of 396.7p to
Shareholders for every 100.0p invested at launch (April 1998)
-- NAV per share increased 3.9 per cent to 74.4p in the 12
months to 30 September 2020, before deductions of dividends.
-- Annual tax free dividend yield of 9.1% based on 6.5p
dividends paid (including proposed final dividend of 3.5p) and
opening NAV of 71.6p
-- GBP8.6million of investments made into 5 new and 10 follow-on
opportunities during the year.
Our Investment Objective
Baronsmead Venture Trust plc 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.
A more detailed explanation of how the investment policy and
business model are applied is provided in the Other Matters section
of the Strategic Report below. The full investment policy can be
found in the full Annual Report.
CHAIRMAN'S STATEMENT
Despite the unprecedented challenges faced by the portfolio
during the financial year to 30 September 2020 I am pleased to be
able to report a valuation increase in NAV of 3.9 per cent. before
the payment of dividends.
After the significant reduction in values of the public company
portfolios as reported in the six months to March 2020, I am
delighted to report a material bounce back in the share prices of
the directly-held AIM stocks in the second half of the year. The
unquoted portfolio also performed positively in the second half of
the financial year, partially recovering some of the decline in
value immediately post the outbreak of the pandemic. Although the
consumer facing businesses, such as restaurants, travel and
childcare, in the public and unquoted portfolios still face
substantial headwinds, these assets represent a relatively small
part of the overall value. Gresham House, the Investment Manager,
is well-resourced to continue supporting the portfolio companies
through the ongoing uncertainty.
Results
Pence per
ordinary
share
NAV as at 1 October 2019 (after final
dividend) 71.6
----------
Valuation increase (3.9 per cent) 2.8
----------
NAV as at 30 September 2020 before dividends 74.4
----------
Less:
Interim dividend paid on 11 September
2020 (3.0)
----------
Proposed final dividend of 3.5p payable,
after shareholder approval, on 5 March
2021 (3.5)
----------
Illustrative NAV as at 30 September 2020
after proposed dividend 67.9
----------
Portfolio Review
At 30 September 2020, the Company's investment portfolio was
valued at GBP95 million and comprised direct investments in a total
of 77 companies of which 32 are unquoted and 45 are quoted
companies. The Company's investments in the LF Gresham House UK
Micro Cap Fund ("Micro Cap") and LF Gresham House UK Multi Cap
Income Fund ("Multi Cap") were valued at GBP30 million at 30
September and provide additional diversity giving investment
exposure to an additional 66 AIM-traded and fully listed companies
and thus spreading investment risk across some 143 companies.
During the 12 months to 30 September 2020, the underlying value
of the unquoted portfolio decreased by 5 per percent. While it is
always disappointing to see a reduction in the value of the
companies, the Board has recognised the efforts of the Manager who
has worked closely with portfolio company management teams helping
them to navigate through the highly disruptive and volatile
economic and social environment. The Manager's review of the year
provides further details of the impact of the pandemic on specific
sectors of the portfolio.
In my half yearly statement I reported that the direct AIM
investments and Equity Fund portfolios each experienced a material
reduction in share prices between mid-February and mid-March as the
markets responded to the uncertainty about the economy, corporate
earnings and in some cases balance sheet resilience as a result of
the COVID-19 pandemic. However despite these setbacks I am pleased
to report that the portfolio of directly held AIM investments
increased by 21 per cent during the year. Our UK Micro Cap fund
delivered a return of 5 per cent compared to the IA UK Smaller
Companies Sector which decreased by 0.4 per cent and the Multi Cap
Income fund increased by 3 per cent compared to the IA UK Equity
Income Sector that fell by 17.2 per cent for the 12 months to 30
September 2020.
The recovery of the AIM traded portfolio emphasises the benefits
of the inclusion of a mixture of both private unquoted and publicly
listed companies within the range of investments. Over the
long-term, the returns profile of the quoted and unquoted
portfolios has proved complementary, with both asset classes
delivering robust performances and low levels of correlation.
Investments and Divestments
The Manager has continued to build its investment activity to
focus on the provision of development capital to earlier stage
companies. The Board is pleased to report that the Company has
continued to make new investments despite the disruption of
COVID-19. During the year the Company invested a total of nearly
GBP9 million in 15 companies. Further details of the new
investments made are included in the Manager's review of the year.
The new investments in earlier stage opportunities may result in
greater volatility in returns over time. However, the more mature,
established portfolio of existing investments should assist in
sustaining returns for shareholders as the new portfolio develops
and grows. The portfolio is also well diversified by sector split
and by the number of holdings.
The Manager continues to focus on driving liquidity in the
portfolio in order to create realised capital profits to fund
current and future dividends for shareholders. There have been a
number of realisations in both the unquoted and quoted portfolios.
For example the sale of Glide, in the unquoted portfolio, delivered
total proceeds of GBP6.2 million for a total gross money multiple
of 2.6x cost. This return is in addition to the 4.8x return made on
the partial exit in 2013 and represents a strong long-term
investment return for shareholders.
There continues to be liquidity in the public markets and the
Investment Manager has made a select number of profitable
realisations within the quoted portfolio where share prices have
rallied strongly since the initial fall during March. The total
AIM-traded sales for the year delivered proceeds of GBP10.6 million
at an overall multiple of 2.2x cost. A full list of realisations
can be found below. Notable examples are the partial realisations
in Bioventix plc realising proceeds of GBP1.1 million at 16.1x cost
multiple, Ideagen plc realising GBP4.4 million proceeds at 5.6x
cost multiple and CentralNic Group plc realising proceeds of GBP1.9
million at 2.1x cost. The Investment Manager also divested holdings
in companies where it did not believe in the long term value
potential. These include Synetics plc, that realised 0.6x cost, and
STM Group plc, that realised 0.7x cost.
As reported last year, the investment in CR7 was sold for nil
proceeds in October 2019. CR7 required further investment beyond
the levels expected and rather than invest, the shareholders agreed
to sell the business to a strategic trade buyer at a level that
unfortunately did not recover any of the investment. This
investment was fully provided for during the last financial year.
Labrador Ltd was written off for nil proceeds (investment cost -
GBP0.2 million) and as a result of balance sheet restructuring in
Armstrong Craven, GBP0.2 million loan note cost was written off for
nil proceeds.
COVID-19 impact
The impact of COVID-19 and the lockdown restrictions faced by
the UK continue to affect all of our lives. As I write this
statement the United Kingdom is still under government restrictions
as a result of a second spike in the number of infections. We
continue to monitor developments and the potential impact that
changes in the economic outlook might have on our portfolio.
However, the disruption and market dislocation also provide
opportunities and we have been encouraged by the follow-on
investments that are being made to continue supporting the growth
plans of our ambitious and innovative investee companies.
As reported in the half yearly report, the current pandemic has
presented operational risks for the Company in respect to the
resilience of third party service providers. The Board has
appreciated the response of key service providers including the
Manager (Gresham House), the Registrar (Computershare) and Link
Asset Services who provide both Company Secretarial support and
fund administration to the Company. All key service providers have
been able to implement their business continuity plans and continue
to follow government advice.
Dividends
The Board is pleased to declare a final dividend of 3.5p per
share for the year to 30 September 2020, payable 5 March 2021. This
is in addition to the 3.0p interim dividend paid in September, and
means that the total dividends for the year are 6.5p. This is a 9.1
per cent yield based on the opening NAV of 71.6p and is above the
target policy of 7 per cent of the NAV at the start of the
year.
The Company has good levels of realised reserves to fund future
dividends and the Manager continues to focus on consistently
selling investments and generating realised profits across the
portfolio which help to sustain the payment of dividends.
Fundraising
In August 2020, the Board announced its intention to raise new
funds to enhance the Company's resources available for new and
follow on investments over the next two to three years.
Consequently, in September 2020 the Company launched an offer for
subscription to raise GBP20 million (before costs) with an
additional GBP17.5 million over allotment facility available as
required. As at the date of this statement there has been GBP15
million invested by shareholders and the offer remains open. We
would like to thank existing shareholders for their continued
support and to welcome new shareholders.
Annual General Meeting ("AGM")
The ongoing impact of the COVID-19 pandemic has led to the
imposition of government restrictions on public gatherings. As a
consequence, it has been necessary to make changes to the way in
which we conduct our forthcoming AGM. In light of the UK
government's current guidance on public gatherings, the Board has
concluded that shareholders will not be permitted to attend this
year's AGM in person.
The Directors appreciate the engagement with shareholders that
takes place at the AGM and in order to maintain this have decided
to live stream the AGM and Investment Manager's presentation. The
AGM will take place at 10.30am on 16 February 2021 and will include
a question and answer section with the Board. There will also be a
separate joint Investment Manager presentation with Baronsmead
Second Venture Trust shareholders held at 11.30am on 16 February
2021.
Registration details for the live stream will be included in the
Notice of AGM and on the Baronsmead website
(www.baronsmeadvcts.co.uk). The live stream of the AGM and the
Investment Manager's presentation will include a facility for
questions to be submitted however in order to cover as many
questions as possible we would appreciate it if shareholders submit
their questions to the Board before the meeting. Shareholders can
submit questions up until noon on 15 February 2021 in the following
ways:
-- By email: send your questions to baronsmeadvcts@greshamhouse.com
-- By telephone: contact Investor Relations on 020 3875 9862
Shareholders will not be able to vote on the resolutions to be
proposed at the AGM on the day of the meeting. Shareholders are
instead being asked to submit their votes by submitting their proxy
electronically or by post as soon as possible. A Notice of AGM is
being sent to shareholders separately to this Annual Report and any
shareholder who wishes to submit questions to the Board or
Investment Manager is encouraged to do so by following the
instructions set out in that Notice and above.
We will continue to monitor the evolving impact of the COVID-19
pandemic and if it becomes necessary to make changes to the
proposed format of the AGM we will inform shareholders as soon as
we are able. We would like to thank all shareholders for their
co-operation and understanding in these challenging times.
Outlook
The impact of COVID-19 has been significant for us all, across
our personal and business lives. The Board was reassured by the
swift reaction of the Manager and their increased engagement with
investee companies in the early stages of the pandemic. As the year
progressed your Company has resumed new investment activity and
continues to support existing and new portfolio companies with the
funds required to support growth initiatives. Several investments
have also been successfully realised since the start of the
pandemic.
COVID-19 presents an unprecedented challenge to the country and
the economy. In the UK, the ongoing Brexit negotiations add an
additional layer of economic uncertainty that may further slow any
recovery. Companies within the portfolio currently employ well in
excess of 15,000 people. The Board believes that Baronsmead Venture
Trust has a role to play in rebuilding UK economic activity by
continuing to back entrepreneurial, rapidly growing enterprises
with both capital and expertise. The Board remains focused on
consistently delivering value for shareholders over the long-term
by continuing to invest in high potential businesses and
maintaining a well-diversified portfolio.
Peter Lawrence
Chairman
3 December 2020
MANAGER'S REVIEW
The financial year under review has been heavily impacted by the
disruption and uncertainty caused by the COVID-19 pandemic. Despite
the large-scale fiscal and monetary stimulus, the national lockdown
and other restrictions led to a drastic decline in economic output
in the months following the outbreak. Public markets have bounced
back strongly since the initial drawdown in late March, driven by
software, technology enabled services and healthcare and education
businesses which to date have been more resilient. While we expect
the economic environment to remain challenging heading into 2021,
we have been encouraged by the way the management teams within our
portfolio companies have responded to the pandemic and are
increasingly looking to capitalise on the opportunities for growth
which are opening up due to the marked shift in consumer behaviour
and corporate priorities being driven by the pandemic.
The portfolio is well diversified, with exposure to over 140
quoted and unquoted companies. Despite the disruption caused by
COVID-19, the complementary mix of quoted and unquoted investments
and weighting towards software, business services, healthcare and
education companies, meant that the portfolio has delivered a
resilient performance during the financial year with net asset
total return increasing by 3.9 per cent.
PORTFOLIO REVIEW
Overview
The net assets of GBP165 million were invested as follows:
NAV % of Number of % return
(GBPm) NAV* investees** in
Asset class the year***
Unquoted 39 24 32 (5)
-------- ------ ------------- -------------
AIM-traded companies 56 34 45 21
-------- ------ ------------- -------------
LF Gresham House UK
Micro Cap Fund 27 16 47 5
-------- ------ ------------- -------------
LF Gresham House UK
Multi Cap Income Fund 3 2 44 3
-------- ------ ------------- -------------
Liquid assets 40 24 N/A -
-------- ------ ------------- -------------
Totals 165 100 168 -
-------- ------ ------------- -------------
* By value as at 30 September 2020.
** Includes investee companies with holdings by more than one
fund. Total number of individual companies held is 143.
*** Return includes interest received on unquoted realisations
during the year.
Represents cash, OEICs net current assets.
The tables below show the breakdown of new investments and
realisations over the course of the year and below is a commentary
on some of the key highlights in both the unquoted and quoted
portfolios.
Investment Activity - Unquoted and Quoted
During the year, GBP8.6 million was invested in 15 companies
including 5 new additions to the portfolio and 10 follow on
investments. Below are descriptions of the new investments
made;
-- Funding Xchange Ltd (unquoted) matches small businesses
looking to borrow to lenders looking to lend, by holding the
underwriting terms of the lenders so borrowers can receive instant
decisions. It also sells its technology back into lenders enabling
them to triage loan applications quicker and more efficiently, a
proposition it calls Credit as a Service.
-- Glisser Ltd (unquoted) is a virtual and hybrid event hosting
platform with an integrated audience response system. The software
integrates live streaming and instant content sharing to personal
devices which improves the delegate experience and provides
powerful event analytics.
-- Rezatec Ltd (unquoted) is a geospatial data analytics company
which applies its machine learning algorithms to a wide range of
earth observation data, such as satellite imagery, soil, weather
and topographic data. The product provides significant productivity
benefits to the managers of forests and energy and water utilities
assets.
-- Clarilis Ltd (unquoted) is a legal document automation
software and services provider, enabling both legal firms and
in-house legal teams to automate legal contracts.
-- Panthera Biopartners Ltd (unquoted) provides patient
recruitment services to clinical research organisations, pharma and
biotech companies. The primary focus is on phase III clinical
trials for new drugs with similar therapeutic areas, such as
chronic obstructive pulmonary disease (COPD), fatty liver disease
and type 2 diabetes.
The Company's investment strategy is focused on companies
operating in parts of the economy that are benefiting from
long-term structural growth trends and in sectors where we have
deep expertise. The amount of capital invested is matched to the
scale, maturity and underlying risk profile of the company seeking
investment. Typically, the initial investment is between GBP0.5
million andGBP3.0 million but can be up to GBP5.0 million with the
expectation of selectively providing follow on funding to the
companies that have executed well and have potential to continue to
grow.
It has been encouraging to see a number of portfolio companies,
both quoted and unquoted, seeking follow on funding from Baronsmead
to support their growth plans, even during the disruption of the
pandemic. The Company made additional investments into 10 portfolio
companies, 5 quoted and 5 unquoted, during the year across a number
of sectors. This provides strong validation of the investment
strategy and demonstrates the improving visibility on future
deployment and increasing conviction in the value creation
opportunity as we build on our existing knowledge of these
companies and our relationships with their management teams.
As Investment Manager we are actively engaged with each
portfolio company working with the management teams to help them
build long-term sustainable competitive advantage to accelerate
growth. In addition to our in-house portfolio team, we have a
network of operating partners who have extensive experience of
supporting earlier stage investee companies and in delivering key
business milestones to help unlock growth.
Unquoted Portfolio
Performance
The unquoted portfolio decreased in value by 5 per cent during
the year. The impact of COVID-19 within the unquoted portfolio has
been most significant across our multi-site nursery chain and
casual dining restaurant assets, where the national lockdowns and
social distancing requirements have resulted in closures and
reduced restaurant capacity. Investments in TravelLocal, a consumer
travel business, and Silkfred, a marketplace for independent
womenswear fashion brands, also experienced a material softening in
demand immediately post the lockdown.
The reduction in the value of investments, primarily as a result
of COVID-19, has largely been offset by uplifts in the technology
and services companies within the portfolio. These companies tend
to have recurring or contracted revenue business models which
provide good visibility over future revenues and cashflows.
SecureCloud+ and Ten10 are good examples of businesses in the
portfolio that have continued to grow strongly over the year.
As Investment Manager we are an engaged and supportive investor.
We are in regular contact with the management teams within the
portfolio, helping them to navigate through the rapidly changing
environment by sharing insight and best practice from across the
portfolio, but also ensuring they continue to tightly manage costs
and closely monitor future cash availability. In general, the
businesses within the portfolio have adapted quickly and we are now
working closely with our management teams to identify opportunities
to both accelerate growth and develop new revenue streams. Through
a combination of our in-house portfolio company talent and
technology functions alongside our extensive network of earlier
stage, high growth company experts, we are well positioned to help
the companies we invest in to develop and scale.
Divestments
During the year the unquoted portfolio returned GBP6.2 million
in proceeds following the realisation of Glide at 2.6x cost in May.
Glide has grown to become the UK's leading provider of fibre
broadband and connectivity into difficult to serve markets such as
multi-tenanted buildings and business parks. Baronsmead Venture
Trust first invested in Glide in 2007 and after a period of strong
growth sold down part of its stake in 2013. Over the course of the
Company's involvement with Glide, the investment has delivered
strong returns for shareholders of over 6.3x original cost.
Along with this successful realisation, the Company realised its
investment in CR7 at a full loss. The investment in CR7 was fully
provided for at 30 September 2019. There has also been a balance
sheet restructuring at Armstrong Craven, to incentivise a new
management team, which resulted in a partial loan note and share
write off. However through earlier interest and loan note
repayments the investment in Armstrong Craven has already returned
original cost.
After the year end the Company successfully completed the sale
of its investment in Ten10. Through acquisitive and organic growth,
Ten10 has become a market leading independent quality engineering
and software testing consultancy. The transaction generated
proceeds of GBP5.9 million and produced an overall investment
return of 3.7x.
Quoted Portfolio (AIM-traded investments)
Performance
The quoted portfolio has performed well, increasing 21 per cent
over the course of the year. This was driven by the larger and more
established AIM holdings, with particular emphasis on those in
resilient parts of the market where their businesses were
benefiting from trends such as digital transformation that have
been accelerated by the pandemic. Significant positive
contributions came from: Cerillion, a software provider into the
telecoms industry, which delivered strong results and material new
contract wins; Wey Education, an online educational services
provider, where enquiries and new business volumes were
significantly enhanced by lockdown and increasing requirements for
remote teaching; and Ideagen, a governance, risk and compliance
software provider, that delivered resilient trading through the
COVID-19 crisis period.
Detractors from performance were Everyman Media, a boutique
cinema operator; and Dods Group, a media and events operator; both
as a result of lockdown temporarily impacting their ability to
operate. Entertainment AI, a digital marketing technology provider,
was de-rated as a result of concerns about reductions to the value
of online advertising inventory, despite delivering results in line
with market expectations.
We closely monitor our AIM portfolio with a rolling programme of
independent reviews of top AIM holdings and broadly continue to be
positive on the long-term investment prospects of these companies.
Many of the larger quoted investments have been long-term holdings.
These companies are typically profitable, cash generative
businesses with low levels of financial gearing and continue to
have attractive long-term growth prospects.
Divestments
Proceeds totalled GBP10.6 million during the year following 7
full and 3 partial realisations. Castleton Technology plc was fully
realised following a takeover by MRI Software, returning 3.6x cost,
while CentralNic plc was also fully realised through market sales
due to risks associated with increasing balance sheet leverage and
the original investment thesis having largely played out, returning
2.1x cost. The opportunity to crystallise some profits was taken in
two companies with proceeds of GBP1.1 million in Bioventix plc
realising 16.1x cost and proceeds of GBP4.4 million in Ideagen plc
realising 5.6x cost. Both companies remain within the portfolio as
long-term holdings. The Manager also took the opportunity to fully
exit holdings in Synectics plc and STM Group plc, long standing
holdings that had underperformed, where market conditions presented
an opportunity to divest realising returns of 0.6x and 0.7x
original cost respectively.
Collective Investment Vehicles
LF Gresham House UK Micro Cap Fund ("Micro Cap") had a positive
return of 5 per cent over the year (2019: -7 per cent). At 30
September 2020, Baronsmead Venture Trust's cumulative GBP7.0
million investment was valued at GBP27.0 million (2019: GBP25.8
million). As at 30 September 2020, the UK Micro Cap fund held
investments in 47 UK publicly listed companies.
The investment in LF Gresham House UK Multi Cap Income Fund
("Multi Cap") has had a modest increase of 3 per cent over the year
(2019: 1 per cent). At 30 September 2020, Baronsmead Venture
Trust's cumulative GBP2.5 million investment was valued at GBP2.9
million (2019: GBP2.8 million). As at 30 September 2020, the Multi
Cap fund held investments in 44 UK publicly listed companies.
The UK Micro Cap and Multi Cap funds are both highly rated funds
by independent ratings agencies. Each fund has performed well on an
absolute basis and also relative to their respective peer groups.
The UK Micro Cap Fund has been consistently top quartile within the
IA UK Smaller Companies sector and is the Fourth best performing
fund over the past 10 years. The UK Multi Cap Fund has been the top
performing fund within the IA UK Equity Income sector since launch
in June 2017. The Manager believes that the Company's investments
in these funds provides shareholders with additional
diversification, as well as access to the potential returns
available from a larger and more established group of companies
that fall within the Manager's core area of expertise.
Liquid assets (cash and near cash)
Baronsmead Venture Trust plc had cash and liquidity OEICs of
approximately GBP40.5 million at the year-end. This asset class is
conservatively managed to take minimal or no capital risk.
Outlook
The ongoing economic impact of the COVID-19 pandemic is likely
to have ramifications across companies and sectors throughout the
coming financial year and beyond. UK and global political and
macro-economic uncertainties are also likely to persist which may
cause market and economic volatility. Whilst these factors create
challenges for companies and for investors they also present
opportunities for entrepreneurial management teams to develop and
grow their businesses.
We believe that the Company's diverse portfolio of companies
with strong fundamentals, in aggregate can deliver resilience and
growth moving forward. Baronsmead's unique positioning among
Venture Capital Trusts with diversification across public and
private markets and by business maturity, sector and business model
gives us confidence in the ability of the Company to produce
attractive and consistent long term investment returns which will
underpin attractive dividends for shareholders over the cycle.
Gresham House Asset Management Ltd
Investment Manager
3 December 2020
Investments in the year
Book cost
Company Location Sector Activity GBP'000
Unquoted investments
New
----------------- -------------- --------------------------------- ---------
Legal document automation
Clarilis Ltd Birmingham TMT software 1,680
----------------- -------------- --------------------------------- ---------
A geospatial data analytics
business
selling into the forestry
and utilities
Rezatec Ltd Oxfordshire TMT sectors worldwide 1,380
----------------- -------------- --------------------------------- ---------
Business
Funding Xchange Ltd London Services SME lending marketplace 705
----------------- -------------- --------------------------------- ---------
Business
Glisser Ltd London Services Audience response software 587
----------------- -------------- --------------------------------- ---------
Panthera Biopartners Healthcare Recruitment services for
Ltd Leeds & Education clinical trials 239
----------------- -------------- --------------------------------- ---------
Follow on
----------------- -------------- --------------------------------- ---------
Storyshare Holdings
Ltd London TMT Employee engagement platform 470
----------------- -------------- --------------------------------- ---------
Custom Materials Retailer of customisable
Ltd London TMT products 396
----------------- -------------- --------------------------------- ---------
Consumer Supplier of customisable
Yappy Ltd Manchester Markets pet products 376
----------------- -------------- --------------------------------- ---------
Tribe Digital Holdings
Pty Ltd London TMT Influencer marketing platform 247
----------------- -------------- --------------------------------- ---------
Automated online investment
Munnypot Ltd West Sussex TMT platform 223
----------------- -------------- --------------------------------- ---------
Total unquoted investments 6,303
---------
AIM-traded investments
Follow on
----------------- -------------- --------------------------------- ---------
Rosslyn Data Technologies Data analytics software
plc London TMT platform 720
----------------- -------------- --------------------------------- ---------
Secure payment services
PCI-PAL plc London TMT provider 696
----------------- -------------- --------------------------------- ---------
One Media iP Group Content acquisition and
plc Buckinghamshire TMT distribution 599
----------------- -------------- --------------------------------- ---------
Business Developer of biological
Eden Research plc Gloucestershire Services fungicides and bio equivalents 225
----------------- -------------- --------------------------------- ---------
Development of antibodies
Fusion Antibodies Healthcare for both therapeutic and
plc Belfast & Education diagnostic applications 90
----------------- -------------- --------------------------------- ---------
Total AIM-traded investments 2,330
---------
Total investments in the year 8,633
---------
TMT - Technology, Media and Telecommunications.
Realisations in the year
First Investment Original Proceeds++ Overall
date book cost(*) GBP'000 multiple
Company GBP'000 return
Unquoted realisations
--------------- ----------------- ------------- ---------- ---------
Glide Ltd Trade sale May 07 2,500 6,214 6.3
--------------- ----------------- ------------- ---------- ---------
CR7 Services Ltd** Write Off Aug 14 1,808 0 0.0
--------------- ----------------- ------------- ---------- ---------
Armstrong Craven Ltd Restructuring Jun 13 197 0 1.1
--------------- ----------------- ------------- ---------- ---------
Labrador Ltd** Write Off Aug 18 233 0 0.0
--------------- ----------------- ------------- ---------- ---------
Total unquoted realisations 4,738 6,214
------------- ---------- ---------
AIM-traded realisations
--------------- ----------------- ------------- ---------- ---------
Ideagen plc Market sale Jan 13 785 4,401 5.6
--------------- ----------------- ------------- ---------- ---------
Synnovia plc (formerly
Plastics Capital plc) Takeover Nov 07 1,586 1,990 1.3
--------------- ----------------- ------------- ---------- ---------
CentralNic Group plc Market sale Jun 15 918 1,941 2.1
--------------- ----------------- ------------- ---------- ---------
Bioventix plc Market sale Jun 13 67 1,084 16.1
--------------- ----------------- ------------- ---------- ---------
Castleton Technology
plc Takeover Nov 14 202 725 3.6
--------------- ----------------- ------------- ---------- ---------
Synectics plc Market sale Jan 04 518 289 0.6
--------------- ----------------- ------------- ---------- ---------
STM Group plc Market sale Mar 08 199 133 0.7
--------------- ----------------- ------------- ---------- ---------
APC Technology Group
plc(#) Takeover Sep 14 79 22 0.3
--------------- ----------------- ------------- ---------- ---------
Brady plc Market sale Dec 10 352 12 0.0
--------------- ----------------- ------------- ---------- ---------
MXC Capital Ltd Repurchase May 15 5 5 0.9
--------------- ----------------- ------------- ---------- ---------
Total AIM-traded realisations 4,711 10,601
------------- ---------- ---------
Total realisations in the year 9,449 16,815
------------- ---------- ---------
*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.
# APC shares were received as part of an exchange; book cost of
APC shares when received is listed here.
** Fully provided for as at 30 September 2019.
Strategic Report
Ten Largest Investments
The top ten investments by current value at 30 September 2020
illustrate the diversity of investee companies within the
portfolio. For consistency across the top ten and based on guidance
from the AIC, data extracted from the last set of published audited
accounts is shown in the tables below. However, this may not always
be representative of underlying financial performance for several
reasons. Published accounts lodged at Companies House may be out of
date and the Manager works from up to date monthly management
accounts and has access to draft but unpublished annual audited
accounts. In addition, pre-tax profit in statutory accounts is
often not a representative indicator of underlying profitability as
it can be impacted by, for example, deductions of non-cash items
such as amortisation that relate to investment structures rather
than operating performance.
1. Cerillion Plc - London
Quoted
www.cerillion.com
All funds managed by Gresham House
First investment: November 2015
Total original cost: GBP4,000,000
Total equity held: 17.8%
Baronsmead Venture Trust only
Original cost: GBP1,800,000
Valuation: GBP7,247,000
Valuation basis: Bid Price
Income recognised in the year: GBP120,000
% of equity held: 8.0%
Voting rights: 8.0%
Year ended 30 September
2020 2019
GBP million GBP million
Sales: 20.8 18.8
Pre-tax profits 2.6 2.4
Net Assets: 16.0 15.5
No. of Employees: n/a* 203
Source: Cerillion plc, Final results announcement 30 September
2020.
*2020 no. of employees is not publicly available.
2. Carousel Logistics Ltd - Sittingbourne
Unquoted
www.carousel.eu
All funds managed by Gresham House
First investment: October 2013
Total original cost: GBP4,245,000
Total equity held: 26.7%
Baronsmead Venture Trust only
Original cost: GBP1,910,000
Valuation: GBP6,488,000
Valuation basis: Earnings Multiple
Income recognised in the year: GBP175,000
% of equity held: 12.0%
Voting rights: 12.9%
Year ended 31 December
2019 2018
GBP million GBP million
Sales: 54.4 38.5
Pre-tax profits (2.3) (1.6)
Net Assets: (6.4) (2.1)
No. of Employees: 283 124
Source: Carousel Logistics Holdings Limited, Annual Report and
Financial Statements
31 December 2019.
3. Ten10 Group Ltd - London
Unquoted
www.ten10.com
All funds managed by Gresham House
First investment: February 2015
Total original cost: GBP4,237,000
Total equity held: 20.8%
Baronsmead Venture Trust only
Original cost: GBP1,908,000
Valuation: GBP5,510,000
Valuation basis: Sales proceeds
Income recognised in the year: GBP421,000
% of equity held: 9.3%
Voting rights: 8.4%
Year ended 30 April
2020 2019
GBP million GBP million
Sales: 26.5 24.9
Pre-tax profits (0.3) (0.4)
Net Assets: (4.6) (0.1)
No. of Employees: 248 228
Source: Ten10 Group Limited, Annual Report and Financial
Statements 30 April 2020.
4. Ideagen Plc - Nottinghamshire
Quoted
www.ideagen.com
All funds managed by Gresham House
First investment: January 2013
Total original cost: GBP1,309,000
Total equity held: 2.1%
Baronsmead Venture Trust only
Original cost: GBP589,000
Valuation: GBP4,200,000
Valuation basis: Bid Price
Income recognised in the year: GBP11,000
% of equity held: 1.0%
Voting rights: 1.0%
Year ended 30 April
2020 2019
GBP million GBP million
Sales: 56.6 46.7
Pre-tax profits (0.1) 1.4
Net Assets: 76.9 73.7
No. of Employees: 537 451
Source: Ideagen plc, Annual Report and Accounts, 30 April
2020.
5. Bioventix plc - Surrey
Quoted
www.bioventix.com
All funds managed by Gresham House
First investment: June 2013
Total original cost: GBP562,000
Total equity held: 4.8%
Baronsmead Venture Trust only
Original cost: GBP253,000
Valuation: GBP3,855,000
Valuation basis: Bid Price
Income recognised in the year: GBP154,000
% of equity held: 1.8%
Voting rights: 1.8%
Year ended 30 June
2020 2019
GBP million GBP million
Sales: 10.3 9.3
Pre-tax profits 8.2 7.0
Net Assets: 12.5 10.8
No. of Employees: 16 16
Source: Bioventix plc, Annual Report and Financial Statements 30
June 2020.
Excludes collective investment vehicles.
6. Custom Materials Limited (trading as Moteefe) - London
Unquoted
www.moteefe.com
All funds managed by Gresham House
First investment: March 2017
Total original cost: GBP4,431,000
Total equity held: 14.1%
Baronsmead Venture Trust only
Original cost: GBP1,994,000
Valuation: GBP3,758,000
Valuation basis: Last External Funding Round
Income recognised in the year: GBPNil
% of equity held: 6.3%
Voting rights: 6.3%
Year ended 31 December
2019 2017
GBP million GBP million
Net Assets: 1.9 0.5
The Company has received an extension to 31 December 2020 for
the filing of its financial statements for the year ended 31
December 2019. A full set of accounts is not publicly
available.
Source: Custom Materials Ltd, Unaudited Financial Statements 31
December 2018.
7. Netcall Plc - Hertfordshire
Quoted
www.netcall.com
All funds managed by Gresham House
First investment: July 2010
Total original cost: GBP4,354,000
Total equity held: 22.8%
Baronsmead Venture Trust only
Original cost: GBP1,738,000
Valuation: GBP3,664,000
Valuation basis: Bid Price
Income recognised in the year: GBP20,000
% of equity held: 6.9%
Voting rights: 6.9%
Year ended 30 June
2020 2019
GBP million GBP million
Sales: 25.1 22.9
Pre-tax profits 0.5 0.8
Net Assets: 22.9 21.9
No. of Employees: 230 230
Source: Netcall plc, Annual Report and Accounts, 30 June
2020.
Excludes collective investment vehicles.
8. Pho Holdings Ltd
Unquoted
www.phocafe.co.uk
All funds managed by Gresham House
First investment: July 2012
Total original cost: GBP4,402,000
Total equity held: 28.6%
Baronsmead Venture Trust only
Original cost: GBP1,982,000
Valuation: GBP3,286,000
Valuation basis: Earnings, Multiple
Income recognised in the year: GBPNil
% of equity held: 12.9%
Voting rights: 12.9%
Year ended 24 February
2019* 2018**
GBP million GBP million
Sales: 34.4 30.5
Pre-tax profits (1.5) (1.0)
Net Assets: 2.1 3.5
No. of Employees: 678 605
Source: Pho 2012 Ltd, Directors' Report and Financial Statements
24 February 2019.
*52 week period ended 24 February 2019
**52 week period ended 25 February 2018
9. Wey Education plc - London
Quoted
www.weyeducation.com
All funds managed by Gresham House
First investment: December 2015
Total original cost: GBP950,000
Total equity held: 19.6%
Baronsmead Venture Trust only
Original cost: GBP428,000
Valuation: GBP3,054,000
Valuation basis: Bid price
Income recognised in the year: GBPNil
% of equity held: 8.8%
Voting rights: 8.8%
Year ended 31 August
2020 2019
GBP million GBP million
Sales: 8.4 6.0
Pre-tax profits: 0.5 (0.4)
Net Assets: 6.9 5.8
No. of Employees: 141 107
Source: Wey Education plc, Annual Report and Accounts, 31 August
2020.
10. IDOX plc - Reading
Quoted
www.idoxgroup.com
All funds managed by Gresham House
First investment: May 2002
Total original cost: GBP1,641,000
Total equity held: 3.9%
Baronsmead Venture Trust only
Original cost: GBP614,000
Valuation: GBP2,917,000
Valuation basis: Bid Price
Income recognised in the year: GBPNil
% of equity held: 1.4%
Voting rights: 1.4%
Year ended 31 October
2019 2018
GBP million GBP million
Sales: 65.5 66.4
Pre-tax profits (0.0) (30.2)
Net Assets: 44.6 47.9
No. of Employees: 671 804
Source: IDOX plc, Annual Report and Accounts, 31 October
2019.
Principal Risks & Uncertainties
The Board has carried out a robust assessment of the principal
& emerging risks and uncertainties facing the Company and has
included below with an assessment of the appropriate measures taken
in order to mitigate these risks as far as practicable. There is an
ongoing process for identifying, evaluating and managing these
risks which is part of the governance framework detailed in the
Corporate Governance section of the full Annual Report.
A key emerging risk now facing the Company is that of ESG, given
its regulatory, operational and potentially reputational
implications if not appropriately addressed. In order to address
this emerging risk, when looking to a make a new investment the
Manager will use an ESG Decision Tool to identify any material ESG
risks that need to be managed and mitigated. For further detail,
see below.
Principal Context Specific risks we Possible impact Mitigation
Risk face
Loss of The Company must Breach of any of The loss of VCT status The Board maintains a
approval comply with section the rules enabling would result in safety
as a Venture 274 of the Income the Company to hold shareholders margin on all VCT
Capital Tax Act 2007 which VCT status could who have not held tests to ensure
Trust enables its investors result in the loss their shares for the that breaches are
to take advantage of that status. designated holding unlikely to
of tax relief on period having to repay be caused by
their investment the income tax relief unforeseen events
and on future returns. they had already or shocks. The
obtained Investment Manager
and future dividends monitors all of the
and gains would be VCT tests
subject to income on an ongoing basis
tax and capital gains and the
tax. Board reviews the
status of
these tests on a
quarterly basis.
Specialist advisors
review the
tests on a bi-annual
basis and
report to the audit
committee
on their findings.
------------------------ ------------------------ ------------------------ -----------------------
Legislative VCTs were established A change in government The Company might The Board and the
in 1995 to encourage policy regarding not be able to Investment
private individuals the funding of small maintain Manager engage on a
to invest in early companies or changes its asset base leading regular
stage companies made to VCT to its gradual decline basis with HMT and
that are considered regulations and potentially an industry
to be risky and to comply with EU inability to maintain representative bodies
therefore have limited State Aid rules either its buy back to demonstrate
funding options. could result in or dividend policies. the cost benefit of
In return the state a cessation of the VCTs to
provides these tax reliefs for the economy in terms
investors VCT investors or of employment
with tax reliefs changes to the reliefs generation and
which fall under that would make taxation revenue.
the definition of them less attractive In addition, the
state aid. to investors. Board and the
Investment Manager
have considered
the options available
to the
Company in the event
of the
loss of tax reliefs
to ensure
that it can continue
to provide
a strong investment
proposition
for its shareholders
despite
the loss of tax
reliefs.
------------------------ ------------------------ ------------------------ -----------------------
Investment The Company invests Investment in poor Reduction in both The Company has a
performance in small, mainly quality companies the capital value diverse portfolio
UK based companies, with the resultant of investors where the cost of any
both unquoted and risk of a high level shareholdings one investment
quoted. Smaller of failure in the and in the level of is typically less
companies often portfolio. income distributed. than 5 per
have limited product cent of NAV thereby
lines, markets or limiting
financial resources the impact of any one
and may be dependent failed
for their management investment. The
on a smaller number Investment Management
of key individuals team has a strong and
and hence tend to consistent
be riskier than track record over a
larger businesses. long period.
The COVID-19 pandemic The Investment
has had a significant Manager undertakes
impact on the extensive due
performance diligence procedures
of the consumer on every new
markets sector. investment and
reviews the portfolio
composition
maintaining a wide
spread of
holdings in terms of
financing
stage and industry
sector.
In light of the
COVID-19 pandemic,
the Investment
Manager has
undertaken
a thorough risk
review of the
portfolio companies
which has
been reviewed by the
board.
The Investment
Manager has engaged
with management teams
to develop
plans to mitigate the
impact
of the current
crisis.
------------------------ ------------------------ ------------------------ -----------------------
Economic, Whilst the Company Events such as fiscal Reduction in the value The Company invests
political invests in policy changes, of the Company's in a diversified
and other predominantly Brexit, economic assets portfolio of
external UK businesses, the recession, movement with a corresponding companies across
factors UK economy relies in interest or impact on its share a number of industry
heavily on Europe currency price may result in sectors,
as one of its largest rates, civil unrest, the loss of investors which provides
trading partners. war or political through buy backs protection against
This, together with uncertainty or and may limit its shocks as the impact
the increase in pandemics ability to pay on individual
globalisation, means can adversely affect dividends. sectors can vary
that economic unrest the trading depending upon
and shocks in other environment the circumstances. In
jurisdictions, as for underlying addition,
well as in the UK, investments the Manager uses a
can impact on UK and impact on their limited amount
companies, results and of bank gearing in
particularly valuations. its investments
smaller ones that which enables its
are more vulnerable investments
to changes in trading to continue trading
conditions. In through
addition di cult economic
the potential impact conditions.
of leaving the The Board monitors
European and reviews
Union remains the position of the
uncertain. Company,
The risks posed ensuring that
by the COVID-19 adequate cash
pandemic impact balances exist to
on all the economic, allow flexibility.
political and other The Board reviews the
external factors make up
the Company faces. and progress of the
portfolio
each quarter to
ensure that
it remains
appropriately
diversified
and funded.
------------------------ ------------------------ ------------------------ -----------------------
Regulatory The Company is Failure of the Company The Company's The Board and the
& Compliance authorised to comply with any performance Investment
as a self managed of its regulatory could be impacted Manager employ the
Alternative Investment or legal obligations severely by financial services
Fund Manager ("AIFM") could result in penalties and a loss of leading regulatory
under the Alternative the suspension of of reputation lawyers,
Investment Fund its listing by the resulting sponsors, auditors
Managers Directive UKLA and/or financial in the alienation and other
("AIFMD") and is penalties and sanction of shareholders, a advisers to ensure
also subject to by the regulator significant demand the Company
the Prospectus and or a qualified audit to buy back shares complies with all of
Transparency report. and an inability to its regulatory
Directives. attract future obligations. The
It is required to investment. Board has strong
comply with the The suspension of systems in place to
Companies Act 2006 its shares would ensure that
and the UKLA Listing result the Company complies
Rules. in the loss of its with all
VCT taxation status of its regulatory
and most likely the responsibilities.
ultimate liquidation The Investment
of the Company. Manager has a
strong compliance
culture and
employs dedicated
compliance
specialists within
its team
who support the Board
in ensuring
that the Company is
compliant.
The Board is being
kept appraised
of changes in the
regulatory
environment caused by
the COVID-19
pandemic. The Company
Secretary
provides an update at
each Board
meeting.
------------------------ ------------------------ ------------------------ -----------------------
Operational The Company relies The risk of failure Errors in The Board has
on a number of third of the systems and shareholders' appointed an audit
parties, in particular controls of any records or committee who review
the Investment of the Company's shareholdings, the internal
Manager, advisers leading incorrect marketing control ("ISAE3402")
to provide it with to an inability literature, non and/or
the necessary services to service shareholder compliance internal audit
such as registrar, needs adequately, with listing rules, reports from
sponsor, custodian, to provide accurate loss of assets, breach all significant third
receiving agent, reporting and of legal duties and party
lawyers and tax accounting inability to provide service providers,
advisers. and to ensure accurate reporting including
adherence and accounting all the Investment
to all VCT legislation leading to Manager, on a
rules. reputational bi-annual basis to
risk and the potential ensure that
for litigation. A they have strong
cyber attack or data systems and
breach could lead controls in place
to loss of sensitive including
shareholder data Business Continuity
resulting Plans and
in a breach and matters relating to
liability cyber security.
under GDPR. The Board regularly
reviews
the performance of
its service
providers to ensure
that they
continue to have the
necessary
expertise and
resources to provide
a high class service
and always
where there has been
any changes
in key personnel or
ownership.
The operational
requirements
of the Company,
including from
its service
providers, have
been subject to
rigorous testing
(including remote
working and
virtual meetings) as
to their
application during
the COVID-19
pandemic, where
increased use
of out of office
working and
online communication
has been
required. To date the
operational
arrangements have
proven robust.
------------------------ ------------------------ ------------------------ -----------------------
The financial risks faced by the Company are covered within the
Notes to the Financial Statements.
Extract of the Strategic Report
Sustainable Investing
Environmental, Human Rights, Employee, Social and Community
Issues
The Company seeks to conduct its affairs responsibly and the
Manager is encouraged to consider environmental, human rights,
social and community issues, where appropriate, when making
investment decisions and the Board will continue to monitor the
Manager's progress in these areas.
The Company is required, by company law, to provide details of
environmental (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 the effectiveness of these policies. The
Company does not have any employees and as a result does not
maintain specific policies in relation to these matters.
Whilst the requirements under company law to detail ESG matters
are not directly applicable to the Company, the Board is conscious
of its potential impact on the environment as well as its social
and corporate governance responsibilities. The Manager has
presented its ESG strategy to the Board and has started to provide
regular updates to the Board regarding the ESG responsibilities of
its portfolio of investee companies.
Sustainable Investment by the Manager
Gresham House is committed to sustainable investment as an
integral part of its business strategy. During 2020, Gresham House
has taken steps to formalise its approach to sustainability and has
put in place several policies and processes to ensure ESG factors
and stewardship responsibilities are built into asset management
across all funds and strategies, including venture capital
trusts.
Policies and processes
Gresham House has published its Sustainable Investing Policy
along with asset specific policies, including the Public Equity
Policy and the Private Equity Policy found on the Gresham House
website, which cover Gresham House's sustainable investment
commitments, how the investment processes meet these commitments
and the application of the sustainable investment framework.
The Gresham House Board and Management Committee assess
adherence to the commitments in the Sustainable Investment Policies
on an annual basis.
Sustainable Investing Committee
The Sustainable Investing Committee (SIC) was formed at the
start of 2020. It meets monthly and drives sustainability related
deliverables, whilst providing a forum to share best practice,
ideas and education. The Committee is chaired by the Director of
Sustainable Investment and has representation from the Gresham
House Management Committee, each asset division, sales and
marketing.
Embedding ESG analysis
Environmental, social and governance (ESG) analysis is embedded
into the investment process by the Manager in order to build and
protect long-term value for investors.
A framework based on ten key ESG themes is used to structure
analysis, monitor and report on ESG risks and opportunities across
the lifecycle of investments.
ESG Decision Tool
The ten themes are the basis of the ESG Decision Tools which are
used to support the Manager in identifying material ESG risks that
need to be managed and mitigated, and to help shape the due
diligence process for each investment.
The Manager believes the "G" (Governance) of ESG is the most
important factor in its investment processes for public and private
equity. Board composition, governance, control, company culture,
alignment of interests, shareholder ownership structure,
remuneration policy etc. are important elements that will feed into
the Manager's analysis and the company valuation.
The "E" and "S" (Environmental and Social) are assessed as risk
factors during due diligence to eliminate companies that face
environmental and social risks that cannot be mitigated through
engagement and governance changes.
Where material ESG risks are identified, these are reviewed by
the Manager and a decision on how to proceed is documented. The
Manager will then proactively follow up with the investee company
management team and ensure appropriate corrective and preventative
action is taken and any material issues or incidents are recorded
by the Manager.
Stewardship Responsibilities
As an active investor, the Manager acts as a long-term steward
of the assets in which it invests. Active ownership
responsibilities include engagement and voting, which are used to
protect and create value. Gresham House has published its
Engagement and Voting Policy on its website, which sets out the
Manager's approach and explains how integrated these activities are
to its business practices and investment processes.
Engagement
The Manager's investment philosophy means that it is an actively
engaged shareholder. The Manager's assessments of management, board
and governance form a critical part of the investment case, which
necessitates that it works with companies on strategy, M&A,
remuneration and related matters, from the outset of the holding
period onwards. The Manager encourages an open and honest dialogue
with the companies as this is an essential part of effective
stewardship.
The Manager will meet face-to-face with the management team of a
publicly listed company at least twice a year, and more frequently
when it owns a material stake of a company. The Manager will
generally work more closely with the management teams of private
equity investments and meet on a more frequent basis. These
meetings form the basis for the ongoing monitoring of a company's
strategy, financial performance and ESG considerations.
Defining engagement objectives
The Manager will usually identify and agree strategic milestones
that it expects a company to deliver on over the holding period.
The Manager will typically identify three or four key strategic
milestones that are bespoke to the organisation and its business
development, aiming to keep the directors focused and ensure
continued progress.
Objectives may change over time depending on several factors,
including business priorities, market forces and stakeholder
considerations. Example of engagement objectives include:
-- Board composition
-- Improvements to governance arrangements
-- Product or geographic expansion or variance, including due to ESG related market forces
-- Staff retention and reduction of absence rates
-- Implementing compliance programmes with forthcoming ESG legislation
-- Improvements to reporting, including ESG factors
The identified objectives provide a framework which forms the
basis of the Manager's discussions with companies during regularly
scheduled engagements.
Voting
Voting is an important part of the Manager's investment strategy
and Gresham House is a signatory to the UK Stewardship Code and the
Principles of Responsible Investment ('PRI'). The Manager devotes
the necessary research, management time and resources to ensuring
it makes thoughtful voting decisions.
Voting decisions are based on the Manager's view of the course
of action which will be in the best interests of the Company. Votes
are informed by various sources including; procedures, research,
engagement with the company, discussions with other stakeholders
and advisers, internal discussions and consultations, and other
relevant information.
Voting decisions
The Manager does not have a set policy defining how voting
decisions should be made on specific items, but has set the
following guidelines:
1. Authority to allot shares - policy to vote against anything over 33 per cent.
2. Disapplication of pre-emption rights - policy to vote against anything over 10 per cent.
3. Authorise company to purchase own shares - policy to vote against anything over 10 per cent.
4. Political donations - policy to vote against all political donations.
Proxy voting providers
The Manager does not use any proxy voting advisory services, but
will usually use proxy voting services to deliver voting decisions
to the companies it invests in.
Stock lending
The Manager does not engage in stock lending, ensuring it
maintains control over how votes are cast.
Voting against management
If the Manager plans to vote against the company decision, it
will engage with the company in advance, explain the reasons for
voting against management and look for ways to avoid that if
possible. If a satisfactory outcome is not reached through this
active dialogue with the company, the Manager will typically tell
the company in advance of its intention to abstain or vote against
management and clarify the reasons grounding such intention.
Voting evidence
In the year to 30 September 2020 the Manager voted on 409
resolutions with 92 per cent votes in favour, 6 per cent votes
against and 2 per cent abstain.
Votes against included a public equity company where we objected
against a political donation.
Applying the Business Model
This section of the Strategic Report sets out the practical
steps that the Board has taken in order to apply the business
model, achieve the investment objective, and adhere to the
investment policy. The investment policy, which is set out in full
in the full Annual Report, is designed to ensure that the Company
continues to qualify and is approved, as a VCT by HM Revenue and
Customs.
Investing in the Right Companies
Investments are primarily made in companies which are
substantially based in the UK, although many of these investees may
have some trade overseas. Investments are selected in the
expectation that the application of private equity disciplines,
including an active management style for unquoted companies, will
enhance value and enable profits to be realised from planned
exits.
The Board has delegated the management of the investment
portfolio to Gresham House. The Manager has adopted a 'top-down,
macro economic and sector-driven' approach to identifying and
evaluating potential investment opportunities, by assessing a
forward view of firstly the broader business environment, then the
sector and finally the specific potential investment
opportunity.
Based on its research, the Manager has selected a number of
sectors that it believes will offer attractive growth prospects and
investment opportunities. Diversification is also achieved by
spreading investments across different asset classes and making
investments for a variety of different periods. The Company's
policy is not to invest in any of the following areas: human
cloning; arms/munitions; or adult content.
The Manager's Review above provides a review of the investment
portfolio and of market conditions during the year, including the
main trends and factors likely to affect the future development,
performance and position of the business.
Risk is spread by investing in a number of different businesses
within different qualifying industry sectors using a mixture of
securities. The maximum the Company will invest in a single company
(including a collective investment vehicle) is 15 per cent of its
investments by value of its investments calculated in accordance
with Section 278 of the Income Tax Act 2007 (as amended) ("VCT
Value"). The value of an individual investment is expected to
increase over time as a result of trading progress and a continuous
assessment is made of its suitability for sale.
The Company invests in a range of securities including, but not
limited to, ordinary and preference shares, loan stocks,
convertible securities and permitted non qualifying investments as
well as cash. Unquoted investments are usually structured as a
combination of ordinary shares and loan stocks or preference
shares, while AIM-traded investments are primarily held in ordinary
shares. Pending investment in VCT qualifying investments, the
Company's cash and liquid funds are held in permitted non
qualifying investments.
VCT Status
Compliance with the required VCT rules and regulations is
considered when all investment decisions are made. Internally, this
is monitored on a continuous basis and it is also reviewed by PwC
every six months to ensure ongoing compliance. PwC have been
appointed by the Company to advise on compliance with VCT
requirements, including evaluation of investment opportunities as
well as appropriate and regular review of the portfolio. Although
PwC works closely with the Investment Manager, they report directly
to the Board.
The principal tests are summarised below. Throughout the year
ended 30 September 2020, and at the date of this report, the
Company continued to meet these tests;
VCT status tests
1) To ensure that the VCT's income in the period has been
derived wholly or mainly (70 per cent plus) from shares or
securities;
2) To ensure that the VCT has not retained more than 15 per cent
of its income from shares and securities;
3) To ensure that the VCT has not made a prohibited payment to
Shareholders derived from an issue of shares since 6 April
2014;
4) To ensure that at least 80 per cent by value of the VCT's
investments has been represented throughout the period by shares or
securities comprised in qualifying holdings of the VCT;
5) To ensure that at least 70 per cent by value of the VCT's
qualifying holdings has been represented throughout the period by
holdings of eligible shares;
6) To ensure that no investment in any company has represented
more than 15 per cent by value of the VCT's investments at the time
of investment;
7) To ensure that the VCT's ordinary capital has throughout the
period been listed on a regulated European market;
8) To ensure that the VCT has not made an investment in a
company which causes it to receive more than the permitted
investment from State Aid sources;
9) To ensure that since 17 November 2015, the VCT has not made
an investment in a company which exceeds the maximum permitted age
requirement;
10) To ensure that since 17 November 2015, funds invested by the
VCT in another company have not been used to make a prohibited
acquisition; and
11) To ensure that since 6 April 2016, the VCT has not made a
prohibited non-qualifying investment.
Appointment of the Manager
The Board expects the Manager to deliver a performance which
meets the objective of achieving long-term investment returns,
including tax free dividends. A review of the Company's performance
during the financial year, the position of the Company at the year
end and the outlook for the coming year is contained within the
Chairman's Statement above. The Board assesses the performance of
the Manager in meeting the Company's objective against the KPIs
highlighted in the full annual report and accounts.
Continuing Appointment of the Manager
The Board keeps the performance of the Investment Manager under
continual review. The Management Engagement and Remuneration
Committee, comprising all Directors, conducts an annual review of
the Manager's performance and makes a recommendation to the Board
about its continuing appointment.
It is considered that the Manager has executed the Company's
investment strategy according to the Board's expectations.
Accordingly, the Directors believe that the continuing appointment
of Gresham House Asset Management Limited as the Investment Manager
of the Company, on the terms agreed, is in the best interests of
the Company and its shareholders as a whole.
The management agreement
Under the management agreement, the Manager receives a fee of
2.0 per cent per annum of the net assets of the Company. In
addition, the Manager is responsible for providing all secretarial,
administrative and accounting services to the Company for an
additional fee. The Manager has appointed Link Alternative Fund
Administrators Ltd to provide these services to the Company on its
behalf. The Company is responsible for paying the fee charged by
Link Alternative Fund Administrators Ltd to the Manager in relation
to the performance of these services.
Annual running costs are capped at 3.5 per cent of the net
assets of the Company (excluding any performance fee payable to the
Manager and irrecoverable VAT), any excess being refunded by the
Manager by way of an adjustment to its management fee. The running
cost as at 30 September 2020 was 2.2 per cent.
The management agreement may be terminated at any date by either
party giving 12 months' notice of termination and, if terminated,
the Manager is only entitled to the management fees paid to it and
any interest due on unpaid fees.
Performance fees
A performance fee will be payable to the Manager once the total
return on shareholders' funds exceeds an annual threshold of the
higher of 4 per cent or base rate plus 2 per cent calculated on a
compound basis. To the extent that the total return exceeds the
threshold over the relevant period then a performance fee of 10 per
cent of the excess will be paid to the Manager. The amount of any
performance fee which is paid in an accounting period shall be
capped at 5 per cent of shareholders' funds for that period.
No performance fee is payable for the year to 30 September 2020
(2019: GBPnil).
Management retention
The Board is keen to ensure that the Manager continues to have
one of the best investment teams in the VCT and private equity
sector. A VCT incentive scheme was introduced in November 2004
under which members of the Manager's investment team invest their
own money into a proportion of the ordinary shares of each eligible
unquoted investment made by the Baronsmead VCTs. The Board
regularly monitors the VCT incentive scheme arrangements but
considers the scheme to be essential in order to attract, retain
and incentivise the best talent. The scheme is in line with current
market practice in the private equity industry and the Board
believes that it aligns the interests of the Manager with those of
the Baronsmead VCTs.
Executives have to invest their own capital in every eligible
unquoted transaction and cannot decide selectively which
investments to participate in. In addition, the VCT incentive
scheme only delivers a return after each VCT has realised a
priority return built into the structure. The shares held by the
members of the VCT incentive scheme in any portfolio company can
only be sold at the same time as the investment held by the
Baronsmead VCTs is sold. Any prior ranking financial instruments,
such as loan stock, held by the Baronsmead VCTs have to be repaid
in full together with the agreed priority annual return before any
gain accrues to the ordinary shares. This ensures that the
Baronsmead VCTs achieve a good priority return before profits
accrue to the VCT incentive scheme.
Prior to January 2017, executives participating in the VCT
incentive scheme subscribed jointly for a proportion (12 per cent)
of the ordinary shares (but not the prior ranking financial
instruments) available to the Baronsmead VCTs in each eligible
unquoted investment. The level of participation was increased from
5 per cent in 2007 when the Manager's performance fee was reduced
from 20 per cent to its current level of 10 per cent. With effect
from January 2017, an additional limb was added to the VCT
incentive scheme to accommodate the increasing number of "permanent
equity" investments being made by the Baronsmead VCTs. "Permanent
equity" investments are those in which the Baronsmead VCTs hold a
relatively lower proportion of prior ranking instruments (if any at
all) and a higher proportion of permanent equity or ordinary
shares. This means that there are fewer prior ranking instruments
yielding a priority return for the Baronsmead VCTs before any gain
accrues to the ordinary shares, hence this additional limb to
create a hurdle described below. The cut off to define a "permanent
equity" investment is one where permanent equity is greater than 25
per cent of the total or where permanent equity is greater than
GBP250,000.
Under the terms of the amended VCT incentive scheme, in
circumstances where the Baronsmead VCTs hold a sufficient number of
prior ranking financial instruments (a "Traditional Structure"),
the terms are identical to those set out above. However, in
circumstances where the Baronsmead VCTs make a "permanent equity"
investment, the executives participating in the incentive scheme
are required to co-invest pari passu alongside the Baronsmead VCTs
for a proportion (currently 0.75 per cent) of all instruments
available to the Baronsmead VCTs and they also receive an option
over a further proportion (currently 12 per cent) of the ordinary
shares available to the Baronsmead VCTs. The ordinary shares can
only be sold and the option can only be exercised by the scheme
participants when the investment held by the Baronsmead VCTs is
sold. The option exercise price has a built in hurdle rate to
ensure that the options are only "in the money" if the Baronsmead
VCTs achieve a good return (equivalent to the priority return they
would have to achieve prior to any value accruing to the ordinary
shares in a Traditional Structure).
Since the formation of the scheme in 2004, 86 executives have
invested a total of GBP1,049,000 in 72 companies. At 30 September
2020, 45 of these investments have been realised generating
proceeds of GBP350,000,000 for the Baronsmead VCTs and
GBP19,000,000 for the VCT incentive scheme. For Baronsmead Venture
Trust the average money multiple on these 45 realisations was 1.8x
times cost. Had the VCT incentive scheme shares been held instead
by the Baronsmead VCTs, the extra return to shareholders would have
been the equivalent of 3.9p a share over 16 years (based on the
current number of shares in issue). The Board considers this small
cost to retain quality people to be in the best interests of
shareholders.
Advisory and Directors' fees
During the year, Gresham House Asset Management Ltd received
GBP182,000 (2019: GBP107,000) advisory fees, GBP310,000 (2019:
GBP206,000) directors' fees for services provided to companies in
the investment portfolio and incurred abort costs of GBP10,000
(2019: GBP23,000) with respect to investments attributable to
Baronsmead Venture Trust plc.
Alternative Investment Fund Manager's Directive ("AIFMD")
The AIFMD regulates the management of alternative investment
funds, including VCTs. On 22 July 2014, the Company was registered
as a Small UK registered AIFM under the AIFMD.
Viability Statement
In accordance with principle 21 of the Association of Investment
Companies Code of Corporate Governance ("AIC Code"), the Directors
have assessed the prospects of the Company over the three year
period to 30 September 2023.
This period is used by the Board during the strategic planning
process and is considered reasonable for a business of our nature
and size. The three year period is considered the most appropriate
given the forecasts that the Board require from the Manager and the
estimated timeline for finding, assessing and completing
investments.
In making this three year assessment, the Board has taken the
following factors into consideration:
-- The nature of the Company's portfolio
-- The Company's investment strategy
-- The potential impact of the Principal Risks and Uncertainties
-- Share buy-backs
-- The liquidity of the Company's portfolio
-- Market falls and gains, with particular reference to the COVID-19 pandemic
-- Maintaining VCT approval status
The Board has carried out a robust assessment of the above
factors, as they have the potential to threaten its business model,
future performance, solvency, or liquidity. This review has
considered the principal risks as outlined above.
The Board also paid particular attention to the impact of the
COVID-19 pandemic on the economic, regulatory, and political
environment as well as its direct impact upon the Company. The
Board has also evaluated the ability of third party suppliers to
continue to deliver services to the Company during COVID-19. The
Board has considered the ability of the Company to raise finance
and deploy capital. Their assessment took account of the
availability and likely effectiveness of the mitigating actions
that could be taken to avoid or reduce the impact of the underlying
risks, and the large listed portfolio that could be liquidated if
necessary.
The Company's portfolio currently includes a large position in
cash or liquid money market funds. Over the last five years, cash
and liquid money market funds have averaged c.18 per cent of the
NAV and reflected 24.6 per cent of the 30 September 2020 NAV. Cash
balances can be varied due to changes in market conditions, but
positive cash levels are expected to be maintained over the period.
The Company has no debt, and it is expected that the Company will
remain ungeared for the foreseeable future.
The Directors have also considered the Company's income and
expenditure projections and find these to be realistic and
sensible. The Directors have assessed the Company's ability to
cover its annual running costs under several liquidity scenarios in
which the value of liquid assets (including AIM-traded investments
and OEICs) has been subject to sensitivity analysis. The Directors
noted that under none of these scenarios was the Company unable to
cover its costs.
Based on the Company's processes for monitoring costs, share
price discount, the Manager's compliance with the investment
objective, policies and business model, asset allocation and the
portfolio risk profile, the Directors have concluded that there is
a reasonable expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due over the
three year period to 30 September 2023.
Returns to Investors
Dividend policy
The Board will decide the annual dividends each year and the
level of the dividends will depend on investment performance, the
level of realised returns and available liquidity. The dividend
policy guidelines below are not binding and the Board retains the
ability to pay higher or lower dividends relevant to prevailing
circumstances and actual realisations. However, the Board confirms
the following two guidelines that shape its 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 AGM in February/March;
and
-- 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.
Shareholder choice
The Board wishes to provide shareholders with a number of
choices that enable them to utilise their investment in Baronsmead
Venture Trust in ways that best suit their personal investment and
tax planning in a way that treats all shareholders equally.
-- Fund raising | From time to time the Company seeks to raise
additional funds by issuing new shares at a premium to the latest
published net asset value to account for costs. The Company
currently has an Offer open to raise up to GBP20 million, with an
additional GBP1.75 million over allotment facility available as
required.
-- Dividend Reinvestment Plan | The Company offers a Dividend
Reinvestment Plan which enables shareholders to purchase additional
shares through the market in lieu of cash dividends. Approximately
1,875,000 shares were bought in this way during the year 30
September 2020.
-- Buy back of shares | From time to time the company buys it
own shares through the market in accordance with its share price
discount policy. Subject to the likely impact on shareholders as a
whole the funding requirements of the Company and market conditions
at the time, the Company seeks to maintain a mid share price
discount of approximately 5 per cent to net asset value where
possible. However shareholders should note this discount may widen
during the periods of market volatility.
-- Secondary market | The Company's shares are listed on the
London Stock Exchange and can be bought using a stockbroker or
authorised share dealing service in the same way as shares of any
other listed company. Approximately 665,000 shares were brought by
investors in the Company's existing shares in the year to 30
September 2020.
On behalf of the Board
Peter Lawrence
Chairman
3 December 2020
Extract of the Directors' Report
Shares and shareholders
Share capital
Pursuant to the Prospectus published by the Company on 3 October
2019 in conjunction with Baronsmead Second Venture Trust plc in
relation to an offer for subscription to each raise up to GBP20
million (before costs) with an over-allotment facility to each
raise up to a further GBP5 million, the Company issued a total of
32,152,130 ordinary shares in that year by way of four allotments,
raising approximately GBP25 million (before costs). Details of
these allotments are as set out below:
-- On 20 November 2019, the Company issued 13,992,088 ordinary
shares under the first allotment at an issue price of 76.80p per
share. The shares were admitted to trading on 21 November 2019.
-- On 23 January 2020, the Company issued 8,068,855 ordinary
shares under the second allotment at an issue price of 82.40p per
share. The shares were admitted to trading on 24 January 2020.
-- On 27 February 2020, the Company issued 6,262,000 ordinary
shares under the third allotment at an issue price of 83.70p per
share. The shares were admitted to trading on 28 February 2020.
-- On 6 March 2020, the Company issued an additional 281,420
ordinary shares following an adjustment of the Company's 31 January
2020 NAV, after shareholder approval of the Company's final
dividend at its February 2020 AGM. The shares were issued at a
price of 80.10p and were admitted to trading on 11 March 2020.
-- On 31 March 2020, the Company issued 3,547,767 ordinary
shares under the fourth allotment at an issue price of 63.80p per
share. The shares were admitted to trading on 1 April 2020.
On 10 November 2020 the Company issued 17,488,428 new ordinary
shares pursuant to the offer for subscription set out in the
prospectus published on 16 September 2020. These new shares were
issued at a price of 75.20p per share, representing 6.47 per cent
of the issued share capital following the allotment with an
aggregate nominal value of GBP1,748,843, raising a further
GBP13,151,297 of new funds (before expenses).
At the AGM held on 26 February 2020, the Company was granted
authority to purchase up to 14.99 per cent of the Company's
ordinary share capital in issue at that date on which the Notice of
AGM was published, amounting to 32,241,821 ordinary shares. During
the year, the Company bought back a total of 3,090,873 ordinary
shares to be held in Treasury, representing 1.22 per cent of the
issued share capital as at 30 September 2020, with an aggregate
nominal value of GBP309,087. The total amount paid for these shares
was GBP2,159,714. Since 30 September 2020 the Company has bought
back 77,000 shares. The Company has remaining authority to buy back
29,073,948 shares under the resolution approved at the AGM held in
2020.
During the year, the Company sold 670,000 ordinary shares from
Treasury. The total amount received by the Company for these shares
was GBP456,437. Shares will not be sold out of Treasury at a
discount wider than the discount at which the shares were initially
bought back by the Company.
As at the date of this report, the Company's issued share
capital was as follows:
% of
Shares
Share Total in issue Nominal Value
In issue 270,174,233 100 GBP27,017,423.3
============ ========= ================
Held in treasury 21,745,855 8.05 GBP2,174,585.5
============ ========= ================
In circulation 248,428,378 91.95 GBP24,842,837.8
============ ========= ================
Shareholders
Each 10p ordinary share entitles the holder to attend and vote
at general meetings of the Company, to participate in the profits
of the Company, to receive a copy of the Annual Report &
Financial Statements and to participate in a final distribution
upon the winding up of the Company.
There are no restrictions on voting rights, no securities carry
special rights and the Company is not aware of any agreement
between holders of securities that result in restrictions on the
transfer of securities or on voting rights. There are no agreements
to which the Company is party that may affect its control following
a takeover bid.
In addition to the powers provided to the Directors under UK
company law and the Company's Articles of Association, at each AGM
the shareholders are asked to authorise certain powers in relation
to the issuing and purchasing of the Company's own shares. Details
of the powers granted at the AGM held in 2020, all of which remain
valid, can be found in the last notice of AGM.
The Board is not, and has not been throughout the year, aware of
any beneficial interests exceeding 3 per cent of the total voting
rights.
Tax free dividends
The Company paid or declared the following dividends for the
year ended 30 September 2020:
Dividends GBP'000
Interim dividend of 3.0p
per ordinary share
paid on 11 September 2020 6,914
=======
Final dividend of 3.5p per
ordinary share to be paid
on 5 March 2021 8,086
=======
Total dividends paid for
the year 15,000
=======
* Calculated on shares in issue as at 30 September 2020
Subject to shareholder approval at the AGM, a final dividend of
3.5p per share will be paid on 5 March 2021 to shareholders on the
register at 5 February 2021.
Annual General Meeting
The Annual General Meeting will be held on 16 February 2021. A
separate Notice convening the AGM will be posted to shareholders
and will be separate to the Annual Report. The Notice will include
an explanation of the items to be considered at the AGM and will be
uploaded to the Company's website in due course.
Directors
Appointments
The rules concerning the appointment and replacement of
Directors are contained in the Company's Articles of Association
and the Companies Act 2006. Further details in relation to the
appointed Directors and the governance arrangements of the Board
can be found in the full annual report and accounts.
Directors are entitled to a payment in lieu of three-month
notice by the Company for loss of office in the event of a takeover
bid.
Directors' Indemnity
Directors' and Officers' liability insurance cover is in place
in respect of the Directors. The Company's Articles of Association
provide, subject to the provisions of UK legislation, an indemnity
for Directors in respect of costs which they may incur relating to
the defence of any proceedings brought against them arising out of
their positions as Directors, in which they are acquitted or
judgement is given in their favour by the Court.
Save for such indemnity provisions in the Company's Articles of
Association and in the Directors' letters of appointment, there are
no qualifying third party indemnity provisions in force.
Conflicts of Interest
The Directors have declared any conflicts or potential conflicts
of interest to the Board of Directors which has the authority to
approve such situations. The Company Secretary maintains the
Register of Directors' Conflicts of Interests which is reviewed
quarterly by the Board. Directors advise the Company Secretary and
the Board as soon as they become aware of any conflicts of interest
and do not take part in discussions which relate to any of their
conflicts.
The Board are aware that Peter Lawrence and Susannah Nicklin
also serve together on the Board of Amati AIM VCT Plc. Having
considered the circumstances the Board agree that this does not
represent a conflict of interest and does not impair the
independence of either Mr Lawrence or Ms Nicklin.
Financial Instruments
The Company's financial instruments comprise equity and fixed
interest investments, cash balances and liquid resources including
debtors and creditors that arise directly from its operations such
as sales and purchases awaiting settlement and accrued income. The
financial risk management objectives and policies arising from its
financial instruments and the exposure of the Company to risk are
disclosed in note 3.3 of the accounts.
Responsibility for accounts
The Directors who held office at the date of approval of this
Directors' Report confirm that, so far as they are each aware,
there is no relevant audit information of which the Company's
Auditor is unaware and each Director has taken all the steps that
they ought to have taken as a Director to make themselves aware of
any relevant audit information and to establish that the Company's
Auditor is aware of that information.
Going Concern
After making enquiries and bearing in mind the nature of the
Company's business and assets, the Directors consider that the
Company has adequate resources to continue in operational existence
for the foreseeable future. The Going Concern assumption assumes
that the Company will maintain its VCT status with HMRC.
The Directors acknowledge that the COVID-19 outbreak has had a
significant adverse impact globally and that this has caused
substantial volatility in financial markets. The Board nevertheless
consider the Company to be well placed to continue to operate
through the crisis and to continue to operate for at least twelve
months from the date of this report, as the Company has sufficient
liquidity to pay its liabilities as and when they fall due and also
to invest in new opportunities as they arise.
In arriving at this conclusion the Directors have considered the
guidance published by the Financial Reporting Council (FRC)
regarding COVID-19 and going concern.
The Directors note that the Company's third-party suppliers,
including its Investment Manager, Company Secretary, Depositary and
Custodian, Registrar, Auditor and Broker, are not experiencing
significant operational difficulties affecting their respective
services to the Company.
The Directors have considered the liquidity of the Company and
its ability to meet obligations as they fall due for a period of at
least 12 months from the date that these financial statements were
approved. As at 30 September 2020, the Company held cash balances
and investments in readily realisable securities with a value of
GBP40.5 million, representing 24.6 per cent of the Company's
NAV.
The Company has no debt, and it is expected that the Company
will remain ungeared for the foreseeable future.
The Directors have assessed the Company's ability to cover its
annual running costs under several liquidity scenarios in which the
value of liquid assets (including AIM-traded investments and OEICs)
has been subject to sensitivity analysis. The Directors noted that
under none of these scenarios was the Company unable to cover its
costs.
The Company's forecasts and cash flow projections, taking into
account the current economic environment and other, plausibly
possible changes in performance, show that the Company has
sufficient funds to meet both its contracted expenditure and its
discretionary cash outflows in the form of the share buyback
programme and dividend policy.
Listing Rule Disclosure
The Company confirms that there are no items which require
disclosure under Listing Rule 9.4R in respect of the year ended 30
September 2020.
By Order of the Board
Gresham House Asset Management Ltd
Company Secretary
5 New Street Square London EC4A 3TW
3 December 2020
Statement of Directors' Responsibilities in respect of the
Annual Report and the Financial Statements
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 financial
statements for each financial year. Under that law they have
elected to prepare the financial statements in accordance with UK
Accounting Standards, including FRS 102 The Financial Reporting
Standard applicable in the UK and Republic of Ireland.
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 of 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 estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
-- assess the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern;
and
-- use the going concern basis of accounting unless they either
intend to liquidate the Company or to cease operations or have no
realistic alternative but to do so.
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 responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error,
and have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Company and
to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors' Report,
Directors' Remuneration Report and Corporate Governance Statement
that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the
annual financial report
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the company taken as a whole; and
-- the Strategic Report/Directors' report includes a fair review
of the development and performance of the business and the position
of the issuer, together with a description of the principal risks
and uncertainties that they face.
We consider the Annual Report and Financial Statements, taken as
a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the company's
position and performance, business model and strategy.
On behalf of the Board
Peter Lawrence
Chairman
3 December 2020
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the
Company's statutory accounts for the years ended 30 September 2019
and 2020 but is derived from those accounts. Statutory accounts for
2019 have been delivered to the Registrar of Companies, and those
for 2020 will be delivered in due course. The Auditors have
reported on those accounts; their report was (i) unqualified, (ii)
did not include a reference to any matters to which the Auditors
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. The text of the Auditors' report can be
found in the Company's full Annual Report and Accounts at
www.baronsmeadvcts.co.uk
Income Statement
For the year ended 30 September 2020
Year ended Year ended
30 September 2020 30 September 2019
------------------------------------- ---------------------------------------
Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ------- --------------- --------- --------- ---------------- ---------- ---------
Gains/(losses) on
investments 2.3 - 5,865 5,865 - (16,181) (16,181)
Income 2.5 3,679 - 3,679 2,665 - 2,665
Investment management
fee and performance
fee 2.6 (750) (2,251) (3,001) (735) (2,204) (2,939)
Other expenses 2.6 (599) - (599) (597) - (597)
Profit/ (loss) before
taxation 2,330 3,614 5,944 1,333 (18,385) (17,052)
Taxation 2.9 (333) 333 - (61) 61 -
----------------------------- ------- --------------- --------- --------- ---------------- ---------- ---------
Profit/ (loss) for the
year, being total
comprehensive
income for the year 1,997 3,947 5,944 1,272 (18,324) (17,052)
----------------------------- ------- --------------- --------- --------- ---------------- ---------- ---------
Return per ordinary
share:
Basic and Diluted 2.2 0.90p 1.77p 2.67p 0.64 (9.22p) (8.58p)
----------------------------- ------- --------------- --------- --------- ---------------- ---------- ---------
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 Statement of Total
Comprehensive Income of the Company prepared in accordance with
Financial Reporting Standards ("FRS") 102. 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").
The notes below form part of these financial statements.
Statement of Changes in Equity
For the year ended 30 September 2020
Non-distributable reserves Distributable
Reserves
------------------------ ----- --------
Called-up
share Share Revaluation Capital Revenue
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 2.4 - - - (13,553) (1,126) (14,679)
------------------------ ----- ------------ ---------- ------------- -------- ------------ --------
At 30 September 2020 25,268 49,397 29,590 58,399 2,180 164,834
------------------------------- ------------ ---------- ------------- -------- ------------ --------
For the year ended 30 September 2019
Non-distributable reserves Distributable Reserves
--------------------------- -----
Share Revaluation Capital Revenue
Called-up premium reserve reserve reserve Total
Notes share capitalGBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ----- --------------------- -------- ----------- ----------- ----------- ---------
At 1 October 2018 20,628 18,154 50,283 83,004 3,406 175,475
Share Premium cancellation - - - - - -
costs
Profit/ (loss) after
taxation - - (23,374) 5,050 1,272 (17,052)
Net proceeds of share
issues, share buybacks 1,425 10,243 - (3,783) - 7,885
Dividends paid 2.4 - - - (11,870) (3,369) (15,239)
--------------------------- ----- --------------------- -------- ----------- ----------- ----------- ---------
At 30 September 2019 22,053 28,397 26,909 72,401 1,309 151,069
--------------------------- ----- --------------------- -------- ----------- ----------- ----------- ---------
Balance Sheet
As at 30 September 2020
Company Number: 03504214
As at As at
30 September 30 September
2020 2019
Notes GBP'000 GBP'000
--------------------------------------- ------ -------------- --------------
Fixed assets
Investments 2.3 154,292 142,715
Current assets
Debtors 2.7 469 176
Cash at bank and on deposit 11,042 9,792
--------------------------------------- ------ -------------- --------------
11,511 9,968
Creditors (amounts falling due within
one year) 2.8 (969) (1,614)
--------------------------------------- ------ -------------- --------------
Net current assets/ (liabilities) 10,542 8,354
--------------------------------------- ------ -------------- --------------
Net assets 164,834 151,069
--------------------------------------- ------ -------------- --------------
Capital and reserves
Called-up share capital 3.1 25,268 22,053
Share premium 3.2 49,397 28,397
Capital reserve 3.2 58,399 72,401
Revaluation reserve 3.2 29,590 26,909
Revenue reserve 3.2 2,180 1,309
--------------------------------------- ------ -------------- --------------
Equity shareholders' funds 164,834 151,069
--------------------------------------- ------ -------------- --------------
Net asset value per share
- Basic and diluted 2.1 71.35p 75.05p
--------------------------------------- ------ -------------- --------------
The financial statements were approved by the Board of Directors
of Baronsmead Venture Trust plc on 3 December 2020 and were signed
on its behalf by:
Peter Lawrence
Chairman
Statement of Cash Flows
For the year ended 30 September 2020
Year ended Year ended
30 September 30 September
2020 2019
GBP'000 GBP'000
Cash flows from operating activities
Investment income received 3,348 2,756
Investment management fees paid (2,932) (3,612)
Other cash payments (595) (616)
Net cash outflow from operating activities (179) (1,472)
------------------------------------------------------- ------------- -------------
Cash flows from investing activities
Purchases of investments (36,649) (12,911)
Disposals of investments 30,221 30,477
Net cash (outflow)/ inflow from investing activities (6,428) 17,566
------------------------------------------------------- ------------- -------------
Equity dividends paid (14,679) (15,239)
------------------------------------------------------- ------------- -------------
Net cash (outflow)/ inflow before financing activities (21,286) 855
Financing activities
Net proceeds of share issues, share buybacks
& sale of shares from treasury 22,536 7,847
Net cash inflow from financing activities 22,536 7,847
------------------------------------------------------- ------------- -------------
Increase in cash 1,250 8,702
Reconciliation of net cash flow to movement in
net cash
Increase in cash 1,250 8,702
Opening cash position 9,792 1,090
Closing cash at bank and on deposit 11,042 9,792
------------------------------------------------------- ------------- -------------
Reconciliation of profit/(loss) before taxation
to net cash outflow from operating activities
Profit/(loss) before taxation 5,944 (17,052)
(Gains)/losses on investments (5,865) 16,181
(Increase)/decrease in debtors (329) 91
Increase/(decrease) in creditors 71 (692)
Net cash (outflow) from operating activities (179) (1,472)
======================================================= ============= =============
Notes to the Financial Statements
We have grouped notes into sections under three key
categories:
1. Basis of preparation
2. Investments, performance and shareholder returns
3. Other required disclosures
The key accounting policies have been incorporated throughout the
Notes to the Financial Statements adjacent to the disclosure to
which they relate. All accounting policies are included within an
outlined box.
1. Basis of Preparation
1.1 Basis of Accounting
These Financial Statements have been prepared under FRS 102 'The
Financial Reporting Standard applicable in the UK and Republic of
Ireland' and in accordance with the Statement of Recommended Practice
("SORP") for investment trust companies and venture capital trusts
issued by the Association of Investment Companies ("AIC") in November
2014 and updated in January 2017, February 2018 and October 2019
and on the assumption that the Company maintains VCT status with
HMRC.
The application of the Company's accounting policies requires judgement,
estimation and assumption about the carrying amount of assets and
liabilities. These estimates and associated assumption are based
on historical experience and other factors that are considered to
be relevant. Actual results may differ from these estimates.
After making the necessary enquiries, including those made during
the preparation of the viability statement in the Strategic Report,
the Directors believe that it is reasonable to expect that the Company
will continue to be able to meet its liabilities as and when they
fall due for a period of at least 12 months, therefore it is appropriate
to apply the going concern basis in preparing the financial statements.
The Directors acknowledge the significant adverse effect that the
COVID-19 outbreak has had globally, however the Directors consider
the Company to be well placed to continue to operate through the
crisis and for at least twelve months from the date of this report.
The Company has no debt and has sufficient liquidity to meet both
its contracted expenditure and its discretionary cash outflows,
including to invest in new opportunities as they arise. The Directors
note that the Company's third-party suppliers are not experiencing
significant operational difficulties affecting their respective
services to the Company. The Directors have also assessed the Company's
ability to cover its annual running costs under several liquidity
scenarios in which the value of liquid assets (including AIM-traded
investments and OEICs) has been subject to sensitivity analysis,
taking into account the current economic environment and other,
plausibly possible changes in performance. It is therefore appropriate
to apply the going concern basis in preparing the financial statements.
2. Investments, Performance and Shareholder Returns
2.1 Net Asset Value Per Share
Number Net asset value Net asset value
of ordinary shares per share attributable attributable
================ ========================== ========================== ==========================
30 September 30 September 30 September 30 September 30 September 30 September
2020 2019 2020 2019 2020 2019
number number pence pence GBP'000 GBP'000
================ ============ ============ ============ ============ ============ ============
Ordinary shares
(basic) 231,016,950 201,285,693 71.35 75.05 164,834 151,069
================ ============ ============ ============ ============ ============ ============
2.2 Return Per Share
Weighted average number Return per Net profit/ (loss)
of ordinary shares ordinary share after taxation
======== ========================= ========================== ==========================
30 September 30
2020 September 30 September 30 September 30 September 30 September
number 2019 2020 2019 2020 2019
number pence Pence GBP'000 GBP'000
Revenue 222,939,528 198,747,709 0.90 0.64 1,997 1,272
Capital 222,939,528 198,747,709 1.77 (9.22) 3,947 (18,324)
Total 2.67 (8.58) 5,944 (17,052)
======== ============ =========== ============ ============ ============ ============
2.3 Investments
The Company has fully adopted sections 11 and 12 of FRS 102.
Purchases or sales of investments are recognised at the date of
transaction at present value.
Investments are subsequently measured at fair value through Profit
and Loss . For AIM-traded securities this is either bid price or
the last traded price, depending on the convention of the exchange
on which the investment is traded.
In respect of collective investment vehicles, which consists of
investments in open ended investment companies authorised in the
UK, this is the closing price.
In respect of unquoted investments, these are valued at fair value
by the Directors using methodology which is consistent with the
International Private Equity and Venture Capital Valuation guidelines
("IPEV").
Judgements
The key judgements in the fair valuation process are:
i) The Manager's determination of the appropriate application of
the IPEV to each unquoted investment;
ii) The Directors' consideration of whether each fair value is appropriate
following detailed review and challenge. The judgement applied in
the selection of the methodology used for determining the fair value
of each unquoted investment can have a significant impact upon the
valuation.
Estimates
The key estimate in the Financial Statements is the determination
of the fair value of the unquoted investments. This estimate is
key as it significantly impacts the valuation of the unlisted investments
at the balance sheet date. The fair valuation process involves estimates
using inputs that are unobservable (for which market data is unavailable).
Fair value estimates are cross-checked to alternative estimation
methods where possible to improve the robustness of the estimate.
As the valuation outcomes may differ from the fair value estimates
a price sensitivity analysis is provided in Other Price Risk Sensitivity
in note 3.3 below. The risk of an over or underestimation of fair
values is greater when methodologies are applied using more subjective
inputs.
Assumptions
The determination of fair value for unquoted investments involves
key assumptions dependent upon the valuation methodology used. The
primary methodologies applied are:
i) Rebased Cost
ii) Earnings Multiple
iii) 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. Rebased cost approach involves
holding the investment at the price set in the latest available
funding round.
The key assumption for the Multiples approach are that the selection
of comparable companies on which to determine earnings multiple
(chosen on the basis of their business characteristics and growth
patterns) and using either historic or forecast revenues (as considered
most appropriate) provide a reasonable basis for identifying relationships
between enterprise value and growth to apply in the determination
of fair value. Other assumptions include the appropriateness of
the discount magnitude applied for reduced liquidity and other qualitative
factors. The assumption of offer less 10 per cent is in line with
our internal valuation methodology.
Gains and losses arising from changes in the fair value of the investments
are included in the Income Statement for the year as a capital item.
Transaction costs on acquisition are included within the initial
recognition and the profit or loss on disposal is calculated net
of transaction costs on disposal.
The nature of the unquoted portfolio currently will influence the
valuation technique applied. The valuation approach recognises that
as stated in the IPEV Guidelines, the price of a recent investment,
if resulting from an orderly transaction, generally represents fair
value as at the transaction date and may be an appropriate starting
point for estimating fair value at subsequent measurement dates.
However, consideration is given to the facts and circumstances as
at the subsequent measurement date, including changes in the market
or performance of the investee company. Milestone analysis is used
where appropriate to incorporate the operational progress of the
investee company into the valuation. Additionally, the background
to the transaction must be considered. As a result, various multiples
based techniques are employed to assess the valuations particularly
in those companies with established revenues. All valuations are
cross-checked for reasonableness by employing relevant alternative
techniques.
All investments are initially recognised and subsequently
measured at fair value. Changes in fair value are recognised in the
Income Statement. The details of which are set out in the box
above.
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.
As at As at
30 September 30 September
2020 2019
GBP'000 GBP'000
=============================== ===================== =============
Level 1
Investments traded on AIM 53,820 48,371
Level 2
Investments listed on LSE 29 -
Investments traded on AIM 1,866 5,870
Collective investment vehicles 59,390 46,793
Level 3
Unquoted investments 39,187 41,681
154,292 142,715
------------------------------- --------------------- -------------
Level 1 Level 2 Level 3
======== ==========================================
Collective
Traded Listed Traded investment
on AIM LSE on AIM vehicles Unquoted Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- ------------------ -------- ------------ --------
Opening book cost 45,024 - 6,520 33,091 31,171 115,806
Opening unrealised
appreciation/(depreciation) 3,347 - (650) 13,702 10,510 26,909
-------------------------------------------- -------- ------------------ -------- ------------ -------- --------
Opening fair value 48,371 - 5,870 46,793 41,681 142,715
-------------------------------------------- -------- ------------------ -------- ------------ -------- --------
Transfer between levels (1,010) 2,315 (2,039)) - 734 -
Purchases at cost 2,330 - - 27,300 6,303 35,933
Sale - proceeds (10,601) - - (15,979) (3,641) (30,221)
Sale - realised gains/(losses) on sales 1,229 - - - (1,451) (222)
Unrealised gains realised during the year 3,315 - - - 91 3,406
Increase/(decrease) in unrealised
appreciation 10,186 (2,286) (1,965) 1,276 (4,530) 2,681
-------------------------------------------- -------- ------------------ -------- ------------ -------- --------
Closing fair value 53,820 29 1,866 59,390 39,187 154,292
-------------------------------------------- -------- ------------------ -------- ------------ -------- --------
Closing book cost 40,287 2,315 4,481 44,412 33,207 124,702
Closing unrealised
appreciation/(depreciation) 13,533 (2,286) (2,615) 14,978 5,980 29,590
-------------------------------------------- -------- ------------------ -------- ------------ -------- --------
Closing fair value 53,820 29 1,866 59,390 39,187 154,292
-------------------------------------------- -------- ------------------ -------- ------------ -------- --------
Equity shares 53,820 29 1,866 - 23,319 79,034
Preference Shares - - - - 2,757 2,757
Loan notes - - - - 13,111 13,111
Collective investment vehicles - - - 59,390 - 59,390
------------------ -------- ------------
Closing fair value 53,820 29 1,866 59,390 39,187 154,292
-------------------------------------------- -------- ------------------ -------- ------------ -------- --------
Two investments held, MXC Capital Ltd (previously Level 1) and
Mi-Pay Group plc (previously Level 2) were transferred to Level 3
following their delisting from AIM. The investment in Hawkwing plc
(previously Level 1, Traded on AIM) has been transferred to Level
1, listed on LSE following its admission to LSE's main market. Dods
(Group) plc has been transferred to Level 2, traded on AIM.
The gains and losses included in the above table have all been
recognised in the Income Statement above.
The Company received GBP16.8 million (2019: GBP20.3 million)
from investments sold in the year. The book cost of these
investments when they were purchased was GBP9.4 million (2019:
GBP10.4 million). These investments have been revalued over time
and until they were sold any unrealised gains or losses were
included in the fair value of the investments.
2.4 Dividends
In accordance with FRS 102, dividends are recognised as a liability
in the period in which they are declared.
Year ended Year ended
30 September 2020 30 September 2019
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ---------- ------------- ----------- ------- ------- -------
Amounts recognised in the
year:
For the year ended 30 September
2020
Interim dividend of 3.0p per
ordinary share paid on 11
September 2020 461 6,453 6,914 - - -
For the year ended 30 September
2019
Final dividend of 3.5p per
ordinary share paid on 3 March
2020 665 7,100 7,765 - - -
Interim dividend of 3.0p per
ordinary share paid on 27
September 2019 - - - 302 5,735 6,037
For the year ended 30 September
2018
Final dividend of 4.5p per
ordinary share paid on 8 March
2019 - - - 3,067 6,135 9,202
1,126 13,553 14,679 3,369 11,870 15,239
-------------------------------- ---------- ------------- ----------- ------- ------- -------
2.5 Income
Interest income on loan notes and dividends on preference shares
are accrued on a daily basis. Provision is made against this income
where recovery is doubtful.
Where the terms of unquoted loan notes only require interest or
a redemption premium to be paid on redemption, the interest and
redemption premium is recognised as income once redemption is reasonably
certain. Until such date interest is accrued daily and included
within the valuation of the investment. When a redemption premium
is designed to protect the value of the instrument holder's investment
rather than reflect a commercial rate of revenue return the redemption
premium should be recognised as capital. The treatment of redemption
premiums is analysed to consider if they are revenue or capital
in nature on a company by company basis. A redemption premium of
GBPnil was received for the year ended 30 September 2020.
Income from fixed interest securities and deposit interest is included
on an effective interest rate basis.
Dividends on quoted shares are recognised as income when the related
investments are marked ex-dividend and where no dividend date is
quoted, when the Company's right to receive payment is established.
Year ended Year ended
30 September 2020 30 September 2019
Quoted Unquoted Quoted Unquoted
securities securities Total securities securities Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ----------- ----------- -------- --------------- -------------- ----------
Income from investments
Dividend income 506 72 578 942 69 1,011
Interest Income 67 3,034 3,101 176 1,418 1,594
Redemption premium - - - - 60 60
Total income 573 3,106 3,679 1,118 1,547 2,665
------------------------ ----------- ----------- -------- --------------- -------------- ----------
All investments have been included at fair value through profit
or loss on initial recognition, therefore all investment income
arises on investments at fair value through profit or loss.
In the year ended 30 September 2020, the Company received
interest income of GBP2.57 million from Glide Ltd (2019:
GBPmil).
2.6 Investment management fee and other expenses
All expenses are recorded on an accruals basis.
Management fees are allocated 25 per cent income and 75 per cent
capital derived in accordance with the Board's expected split between
long term income and capital returns. Performance fees are allocated
100 per cent capital.
Year ended 30 September Year ended 30 September
2020 2019
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment management
fee 750 2,251 3,001 735 2,204 2,939
Performance fee - - - - - -
---------------------- -------- -------- -------- -------- -------- --------
750 2,251 3,001 735 2,204 2,939
---------------------- -------- -------- -------- -------- -------- --------
The management agreement may be terminated by either party
giving 12 months' notice of termination.
The Manager, Gresham House Asset Management Ltd, receives a fee
of 2 per cent per annum of the net assets of the Company,
calculated and payable on a quarterly basis. The collective
investment vehicles, UK Micro Cap and Multi Cap, are also managed
by Gresham House. Arrangements are in place to avoid the double
charging of fees.
The Manager is entitled to a performance fee if at the end of
any calculation period, the total return on shareholders' funds
exceeds the threshold of the higher of 4 per cent or base rate plus
2 per cent on shareholders' funds (calculated on a compound basis).
The Manager is entitled to 10 per cent of the excess. The amount of
any performance fee which is paid in respect of a calculation
period shall be capped at 5 per cent of shareholders' funds at the
end of the period.
Amounts payable to the Manager at the year end are disclosed in
note 2.8.
Other expenses
Year ended Year ended
30 September 30 September
2020 2019
GBP'000 GBP'000
Directors' fees 111 109
Secretarial and accounting fees paid to the Manager 154 152
Remuneration of the auditors and their associates:
- audit 58 28
- other services supplied pursuant to legislation
(interim review) - 7
Other 276 301
599 597
==================================================== ============ ============
Information on directors' remuneration is given in the
directors' emoluments in the full annual report and accounts.
Charges for other services provided by the auditors in the year
ended 30 September 2020 were in relation to the interim review. The
Audit Committee reviews the nature and extent of non-audit services
to ensure that independence is maintained. The Directors consider
that the auditors were best placed to provide such services.
2.7 Debtors
As at As at
30 September 30 September
2020 2019
GBP'000 GBP'000
------------------------------- ------------ ------------
Prepayments and accrued income 469 140
Amounts due from brokers - 36
469 176
=============================== ============ ============
2.8 Creditors (amounts falling due within one year)
As at As at
30 September 30 September
2020 2019
GBP'000 GBP'000
Management, secretarial and accounting fees due
to the Manager 865 797
Amount due to brokers - 716
Other creditors 104 101
------------------------------------------------ ------------ ------------
969 1,614
================================================ ============ ============
2.9 Tax
UK corporation tax payable is provided on taxable profits at the
current rate.
Provision is made for deferred taxation, without discounting, on
all timing differences and is calculated using substantively enacted
tax rates.
This is subject to deferred tax assets only being recognised if
it is considered more likely than not that there will be suitable
profits from which the future reversal of the underlying timing
differences can be deducted.
A reconciliation of the tax (credit)/charge to the profit/(loss)
before taxation is shown below:
Year ended Year ended
30 September 2020 30 September 2019
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- -------- -------- -------- --------
Profit/(loss) before taxation 2,330 3,614 5,944 1,333 (18,385) (17,052)
------------------------------ -------- -------- -------- -------- -------- --------
Corporation tax at 19.0
per cent
(2019: 19.0 per cent) 443 687 1,130 253 (3.493) (3,240)
Effect of:
Non-taxable gains - (1,114) (1,114) - 3,074 3,074
Non-taxable dividend income (110) - (110) (192) - (192)
Non-deductible expenses - - - - - -
Losses carried forward - 94 94 - 358 358
============================== ======== ======== ======== ======== ======== ========
Tax charge/ (credit) for
the year 333 (333) - 61 (61) -
============================== ======== ======== ======== ======== ======== ========
At 30 September 2020 the Company had surplus management expenses
of GBP12,254,634 (2019: GBP12,271,403) which have not been
recognised as a deferred tax asset. This is because the Company is
not expected to generate taxable income in a future period in
excess of the deductible expenses of that future period and,
accordingly, the Company is unlikely to be able to reduce future
tax liabilities through the use of existing surplus expenses. Due
to the Company's status as a VCT, and the intention to continue
meeting the conditions required to obtain approval in the
foreseeable future, the Company has not provided deferred tax on
any capital gains and losses arising on the revaluation or disposal
of investments.
3. Other Required Disclosures
3.1 Called-up share capital
Allotted, called-up and fully paid:
Ordinary shares GBP'000
================================================================== =======
220,533,675 ordinary shares of 10p each listed at 30 September
2019 22,053
32,152,130 ordinary shares of 10p each issued during the year 3,215
252,685,805 ordinary shares of 10p each listed at 30 September
2020 25,268
================================================================== =======
19,247,982 ordinary shares of 10p each held in treasury at 30
September 2019 (1,924)
3,090,873 ordinary shares of 10p each repurchased during the year
and held in treasury (309)
(670,000) ordinary shares of 10p each sold from treasury during
the year 67
21,668,855 ordinary shares of 10p each held in treasury at 30
September 2020 (2,166)
------------------------------------------------------------------ -------
231,016,950 ordinary shares of 10p each in circulation* at 30
September 2020 23,102
------------------------------------------------------------------ -------
* Carrying one vote each.
The 32,152,130 ordinary shares were issued at an average price
of 76.675p.
During the year the Company bought back 3,090,873 ordinary
shares and sold from treasury 670,000 shares, representing 1.4 per
cent of the ordinary shares in issue at the beginning of the
financial year.
Treasury shares
When the Company reacquires its own shares, they are held as
treasury shares and not cancelled.
Shareholders have authorised the Board to sell treasury shares
at a discount to the prevailing NAV subject to the following
conditions:
- It is in the best interests of the Company;
- Demand for the Company's shares exceeds the shares available in the market;
- A full prospectus must be produced if required; and
- HMRC will not consider these 'new shares' for the purpose of
the purchasers' entitlement to initial income tax relief.
3.2 Reserves
Gains and losses on realisation of investments of a capital nature
are dealt with in the capital reserve. Purchases of the Company's
own shares to be either held in treasury or cancelled are also funded
from this reserve. 75 per cent of management fees are allocated
to the capital reserve in accordance with the Board's expected split
between long term income and capital returns.
Distributable reserves Non-distributable reserves
================================ =======================================
Capital Revenue Share Revaluation
reserve reserve Total premium reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================ ========== ================ ========= ============= ============== ========
At 1 October 2019 72,401 1,309 73,710 28,397 26,909 55,306
Gross proceeds of share issues - - - 21,685 - 21,685
Purchase of shares for treasury (2,160) - (2,160) - - -
Sale of shares from treasury 456 - 456 - - -
Expenses of share issue and
buybacks (11) - (11) (685) - (685)
Reallocation of prior year
unrealised gains/losses 3,406 - 3,406 - (3,406) (3,406)
Realised loss on disposal
of investments(#) (222) - (222) - - -
Net increase in value of
investments(#) - - - - 6,087 6,087
Management fee charged to
capital(#) (2,251) - (2,251) - - -
Taxation relief from capital
expenses(#) 333 - 333 - - -
Profit after taxation(#) - 1,997 1,997 - - -
Dividends paid in the year (13,553) (1,126) (14,679) - - -
================================ ========== ================ ========= ============= ============== ========
At 30 September 2020 58,399 2,180 60,579 49,397 29,590 78,987
================================ ========== ================ ========= ============= ============== ========
(#) The total of these items is GBP5,944k, which agrees to the
total profit for the year.
* Changes in fair value of investments are dealt with in this
reserve.
Distributable reserves may also include any net unrealised gains
on investments whose prices are quoted in an active market and
deemed readily realisable in cash.
Share premium is recognised net of issue costs.
The Company does not have any externally imposed capital
requirements.
3.3 Financial instruments risks
The Company's financial instruments comprise equity and fixed
interest investments, cash balances and liquid resources including
debtors and creditors. The Company holds financial assets in
accordance with its investment policy to invest in a diverse
portfolio of UK growth businesses.
The Company's investing activities expose it to a range of
financial risks. These key risks and the associated risk management
policies to mitigate these risks are described below.
Market risk
Market risk includes price risk on investments and interest rate
risk on investments and other financial assets and liabilities.
Price Risk
The investment portfolio is managed in accordance with the
policies and procedures described in the full Audited Annual Report
and Financial Statements of the Strategic Report.
Investments in companies listed on the AIM market usually
involve a higher risk than investments in larger companies quoted
on a recognised stock exchange. The spread between the buying and
selling price of such shares may be wide and the price used for
valuation may be limited and many may not be achievable. The
valuation of the Portfolios and opportunities for realisation of
AIM-traded investments within the portfolios may also depend on
stock market conditions.
The Company aims to reduce these risks by diversifying the
portfolio across business sectors and asset classes. The Board
monitors the portfolio on a quarterly basis.
Investments in unquoted companies, by their nature, usually
involve a higher degree of risk than investments in companies
quoted on a recognised stock exchange. The fair valuation of these
unquoted investments is influenced by the estimates, assumptions
and judgements made in the fair valuation process (see 2.3 above).
The estimation uncertainty for unquoted investments held as at 30
September 2020 has been further increased by the COVID-19 pandemic
and associated government intervention.
Price Risk Sensitivity
As at 30 September 2020, each unquoted company has been
classified as having a higher, medium or lower level of estimation
uncertainty by considering a range of factors including the
availability and extent of cash resources, and the potential
disruption to business activities caused by measures adopted to
tackle the spread of COVID-19. In addition, the impact of COVID-19
on the relevant industry, liquidity concerns for the specific
company, and operational impacts on the business were also
considered in arriving at the level of estimation uncertainty. For
example, we have classified investments in the casual dining and
travel sectors as higher risk as the impact of COVID-19 on these
industries has been particularly severe. There is higher
uncertainty around the estimated sustainable earnings of these
businesses, and the extent of their cash resources, and therefore
there are a larger range of possible outcomes from the valuation of
these investments.
A greater sensitivity factor has been applied to those
investments assessed as having a higher level of estimation
uncertainty. The sensitivities applied illustrate the impact of
varying the key inputs by the levels specified, however it is
possible that by applying reasonable alternative assumptions to
individual investments, the fair value may vary to a greater extent
than that illustrated.
The sensitivity factors applied to each risk category are based
on experience of valuation movements during the pandemic so far. A
higher sensitivity of 30 per cent has been applied to the higher
risk companies, to reflect that the full impact of COVID-19 is much
more uncertain and challenging to predict than for the medium and
lower risk companies, where a sensitivity of between 20 per cent
and 5 per cent has been applied.
The table below reflects both the potential positive and
negative impacts of COVID-19, recognising that there are
investments that in our view bear increased valuation uncertainty
due to possible positive impacts from COVID-19. The combined value
of the holdings felt to be more likely to see a positive impact is
GBP8.9 million. Several of these holdings have benefitted from the
increased shift to e-commerce, for example Yappy and Custom
Materials, and others, such as SecureCloud+, have benefitted from
the growth in remote working and newly fragmented workforces.
The table below has split out each risk category and applied
both upside and downside sensitivities to the key variable inputs.
The sensitivities give an indication of the effect of changing one
or more of the inputs to these valuations, and the impact of
increased volatility depending on exposure to the future and
current effects of COVID-19. The valuation has then been
recalculated using this adjusted key variable input, in order to
determine the impact on the fair value of the Company's investment.
The structure of the investment will vary between investee
companies, and therefore the impact on the investment's fair value
will vary. For example, the Company hold a preferred, or priority
position, in many of the investee companies and therefore in these
cases may be more protected from severe downside scenarios.
P ositive Impact Negative Impact
Risk
Level Fair % of net
Valuation Key variable Sensitivity Value assets % of net
Security basis inputs % GBP'000s GBP0'000s GBP0'000 GBP0'000 Assets
--------- ----------- ------------ ---------- ----------- --------- --------- --------- ---------- ----------
Earnings Estimated
Multiple sustainable
earnings
Selection of
comparable
companies High +/-30 7,582 1,957 1.2 (3,872) (2.3)
Application
of
illiquidity
discount Medium +/-20 14,250 5,467 3.3 (3,463) (2.1)
Probability
estimation
of
Liquidation
Unquoted event Low +/-10 4,698 560 0.3 (361) (0.2)
---------------------- ------------ --------- ----------- --------- --------- --------- ---------- ----------
Price of L atest
recent funding
investment round price Low +/-5 6,895 3,774 2.3 (384) (0.2)
----------- ------------ -------------------- ----------- --------- --------- --------- ---------- ----------
O ther Low +/-5 5,762 288 0.2 (288) (0.2)
------------------------- ------------------- ----------- --------- --------- --------- ---------- ----------
A sensitivity has also been performed for quoted AIM
investments, which are valued at the latest share price set by the
market. A sensitivity of +/-20 per cent has been applied to the
fair value of GBP55.7 million, reflecting the greater level of
volatility in financial markets in 2020 when compared to 2019. A
movement of +/-20 per cent would cause an increase or decrease of
GBP11.1 million to the fair value of the quoted AIM
investments.
The COVID-19 pandemic only emerged during the year ended 30
September 2020, therefore the comparatives for the Price Risk
Sensitivity are presented considering known risks at the prior
reporting date, and exclude possible fluctuations due to
COVID-19.
A sensitivity analysis is provided below which recognises that
the valuation methodologies employed involve different levels of
subjectivity in their inputs. The sensitivity analysis below
applies a wider range of input variable sensitivity to the earnings
multiple method due to the increased subjectivity involved in the
use of this method compared to the rebased cost method, which
refers to the price of a recent investment.
As at 30 September 2019
Impact
% of
Fair Value Sensitivity Impact Net
Security Valuation Basis Key Variable inputs GBP'000 % GBP'000 Assets
------------------ ----------------------------- ---------- ----------- -------- -------
Rebased Cost Latest funding round price 14,549 +/-10 1,455 +/-1.0
------------------ ----------------------------------------- ---------- ----------- -------- -------
Estimated sustainable
earnings
Selection of comparable
companies
Application of illiquidity
discount
Probability estimation
Unquoted Earnings Multiple of Liquidation event* 27,132 +/-20 2,713 +/-1.8
------------------ ----------------------------- ---------- ----------- -------- -------
Current offer price received
Offer less for sale
10% Discount applied to offer - +/-10 - -
------------------ ----------------------------------------- ---------- ----------- -------- -------
Latest share
Quoted AIM price N/A** 54,241 +/-10 5,424 +/-3.6
----------- ------------------ ----------------------------- ---------- ----------- -------- -------
*Latest share price is set by the market.
Key Variable Inputs/Valuation Bases
The key variable inputs applicable to each valuation basis will
vary dependent on the particular circumstances of each unquoted
company valuation. Where there has been a recent transaction, such
as an initial investment being made into the company, or where
there has been a subsequent external funding round, the key
variable input will be the last funding round price. Where this is
not the case, the valuation has been based on a multiple of
estimated sustainable earnings. An explanation of each of the key
variable inputs is provided below and includes an indication of the
range in value for each input, where relevant.
Latest funding round price
The latest funding round price is the key variable input in the
valuation of a company when there has been a recent investment
either by the Company or by another investor. This transaction
provides evidence of the price an independent third party would be
willing to pay for the investment. There is lower estimation
uncertainty where this third party is an external investor, and
higher estimation uncertainty where this is an internal investor
(i.e. where the investor already has an investment in the
company).
Estimated sustainable earnings
The selection of sustainable revenue or earnings will depend
upon whether the company is sustainably profitable or not, and
where it is not then revenues will be used in the valuation. The
valuation approach may use prior year actuals, the last 12 months,
or a forecast of earnings where deemed appropriate. The valuation
approach will typically assess companies based on the prior year
actuals or last 12 months of revenue or earnings, as this
represents the most recently available trading information and
therefore is viewed as the most reliable. Where the company has a
history of accurate forecasting, or where there is a change in
circumstance at the business which will impact earnings going
forward, then a forecast or budget will be deemed most
appropriate.
Selection of comparable companies
The selection of comparable companies is assessed individually
for each investment at the point of investment, and at each
valuation thereafter. The key criteria in selecting appropriate
comparable companies are the industry sector, the business model,
and the respective revenue and earnings growth rates of the
company. Typically between 4 and 14 comparable companies will be
selected for each investment. The resultant revenue or earnings
multiples derived can vary in the range of 2x to 11x.
The earnings multiples can be derived from either listed
companies with similar characteristics or recent comparable
transactions. The value of the unquoted element of the portfolio
may therefore also indirectly be
affected by price movements on the listed exchanges.
Application of illiquidity discount
An illiquidity discount is applied to the majority of unquoted
investments, reflecting that the Company usually holds a minority
stake and that the realisation of the investment may require
cooperation on the timing and sale price from other stakeholders.
The illiquidity discount applied can range from 10 per cent to 30
per cent, depending upon the ownership percentage the Company holds
in the investment.
Probability estimation of Liquidation event
A liquidation event is typically a company sale or an Initial
Public Offering (IPO). The probability of a company sale versus an
IPO is typically estimated from the outset to be 50:50 if there has
been no indication by the company of pursuing either of these
routes. This weighting is then adjusted as either scenario becomes
more or less likely to occur.
Interest rate risk
The Company has the following investments in fixed and floating
rate financial assets:
As at 30 September 2020 As at 30 September 2019
Weighted Weighted
Weighted average Weighted average
average time for average time for
Total interest which rate Total interest which rate
investment rate is fixed investment rate is fixed
GBP'000 % Years GBP'000 % Years
----------------------- ----------- --------- ----------- ----------- --------- -----------
Fixed rate loan note
securities 13,111 7.82 2.02 20,691 8.79 2.91
Floating rate sterling
liquidity funds 29,462 - - 18,140 - -
Cash at bank and on
deposit 11,042 - - 9,792 - -
======================= =========== ========= =========== =========== ========= ===========
53,615 48,623
Movements in interest rates would not significantly affect net
assets attributable to the Company's shareholders and total
profits, due to interest rate income received from floating rate
notes being less than 1 per cent of the total investments.
Credit risk
Credit risk refers to the risk that a counterparty will default
on its obligation resulting in a financial loss to the Company. The
Investment Manager monitors credit risk on an ongoing basis.
At the reporting date, the Company's financial assets exposed to
credit risk amounted to the following:
As at As at
30 September 30 September
2020 2019
GBP'000 GBP'000
---------------------------------------- ------------ ------------
Cash at bank and on deposit 11,042 9,792
Interest, dividends & other receivables 469 176
11,511 9,968
======================================== ============ ============
Credit risk on unquoted loan stock held within unlisted
investments is considered to be part of market risk as disclosed
earlier in the note.
Credit risk arising on transactions with brokers relates to
transactions awaiting settlement. Risk relating to unsettled
transactions is considered to be small due to the short settlement
period involved and the high credit quality of the brokers used.
The Board monitors the quality of service provided by the brokers
used to further mitigate this risk.
All the assets of the Company which are traded on a recognised
exchange are held by JP Morgan Chase ("JPM"), the Company's
custodian. The Board monitors the Company's risk by reviewing the
custodian's internal controls reports as described in the Corporate
Governance section within the full Annual Report and Accounts.
The cash held by the Company is held by JPM. The Board monitors
the Company's risk by reviewing regularly the internal control
reports. Should the credit quality or the financial position of the
bank deteriorate significantly the Investment Manager will seek to
move the cash holdings to another bank.
There were no significant concentrations of credit risk to
counterparties at 30 September 2020 or 30 September 2019. No
individual investment exceeded 4.4 per cent of the net assets
attributable to the Company's shareholders at 30 September 2020
(2019: 5.3 per cent).
Liquidity risk
The Company's financial instruments include investments in
unquoted companies which are not traded in an organised public
market, all of which generally may be illiquid. AIM traded equity
investments also carry a degree of liquidity risk. As a result, the
Company may not be able to liquidate quickly some of its
investments in these instruments at an amount close to their fair
value in order to meet its liquidity requirements, or to respond to
specific events such as deterioration in the creditworthiness of
any particular issuer.
The Company's liquidity risk is managed on an ongoing basis by
the Investment Manager. The Company's overall liquidity risks are
monitored on a quarterly basis by the Board. The Company is a
closed-end fund, assets do not need to be liquidated to meet
redemptions, and sufficient liquidity is maintained to meet
obligations as they fall due.
The Company maintains sufficient investments in cash and readily
realisable securities to pay accounts payable and accrued expenses.
At 30 September 2020 these investments were valued at GBP40,504,000
(2019: GBP27,930,000).
3.4 Investment in Associates
The Company has chosen not to rebut the presumption that the
following holdings are investments in associates, owing to the
proportion of equity held and representation on the Board
representing significant influence over the operations of the
company. The investments held are held as part of an investment
portfolio, and are therefore measured at fair value through profit
and loss, as detailed in note 2.3, rather than using the equity
method, as permitted by section 14 of FRS 102:
Name Location Class of % of Equity Profit (GBPm) Net Assets Results
Shares held (GBPm) for year
ended
31 December
Happy Days Consultancy UK A Ordinary 29.2 (1.9) (8.2) 2018
Storyshare Holdings A ordinary
Ltd* UK & A Preference 23.5 - - -
======================= ========= ================ =========== ============= ========== ===========
*Accounts for Storyshare Holdings Ltd are not publicly
available
3.5 Related parties
Related party transactions include Management, Secretarial,
Accounting and Performance fees payable to the Manager, Gresham
House Asset Management Ltd, as disclosed in notes 2.6 and 2.8, and
fees paid to the Directors along with their shareholdings as
disclosed in the Directors' Remuneration Report. In addition, the
Manager operates a VCT Incentive Scheme, detailed in the Management
retention section of the Strategic Report in the full annual report
and accounts, whereby members and staff of the Manager are entitled
to participate in all eligible unquoted investments alongside the
Company.
During the year, Gresham House Asset Management Ltd received
GBP182,000 (2019: GBP107,000) advisory fees, GBP310,000 (2019:
GBP206,000) directors' fees for services provided to companies in
the investment portfolio and incurred abort costs of GBP10,000
(2019: GBP23,000) with respect to investments attributable to
BVT.
A related party relationship exists between Baronsmead Venture
Trust and Happy Days Consultancy, owing to the significant
influence held over the operations of the company. As at 30
September 2020, the loan balance stood at GBP2,721,000, including
GBP2,204,000 of capitalised interest.
A related party relationship exists between Baronsmead Venture
Trust and Storyshare Holdings Ltd, owing to the significant
influence held over the operations of the company.
The Company also holds an investment in Gresham House plc, as
part of its quoted portfolio. This investment was made in November
2014, prior to the change of investment manager. For further
details on this please refer to the Full Investment Portfolio in
the Appendices.
3.6 Segmental reporting
The Company has one reportable segment being investing in
primarily a portfolio of UK growth businesses, whether unquoted or
traded on AIM.
3.7 Commitments
As at 30 September 2020, the Company has commitments to provide
loan facilities to its investee companies of up to GBP0.5 million,
of which nil has been drawn. Subsequent to the reporting date, the
Company has committed an additional GBP0.7 million, of which nil
has been drawn at the date of this report.
3.8 Post balance sheet events
The following events occurred between the balance sheet date and
the signing of these financial statements:
-- 17 million shares were issued on 10 November 2020 at an
allotment price of 75.2p under the current offer
-- Three full realisations: CR7 Services, realising proceeds of
GBPNil and making a return of 0.0x cost; Brady, realising proceeds
of GBP0.01 m illion and making a return of 0.0x cost; and APC
Technology Group,
realising proceeds of GBP0.02 m illion and making a return of 0.3x cost
-- Two new investments, eConsult and RevLifter, completed totalling GBP3.1 million
-- Two full realisations: Ten10, realising proceeds of GBP5.9
million and making a return of 3.7x cost; and Collagen Solutions,
realising proceeds of GBP0.6 million and making a return of 1.3x
cost
-- One partial realisation: Cerillion plc, realising proceeds of
GBP1.6 million and making a return of 2.6x cost
-- Purchased 77,000 Ordinary Shares of 10p at a price of 67.8p
per share to be held in Treasury
National Storage Mechanism
A copy of the Annual Report and Financial Statements and the
separate circular containing the AGM notice will be submitted
shortly to the National Storage Mechanism ("NSM") and will be
available for inspection at the NSM, which is situated at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Corporate Information
Directors Registrars and Transfer Office
Peter Lawrence (Chairman) Computershare Investor Services plc
Valerie Marshall# The Pavilions
Les Gabb* Bridgwater Road
Susannah Nicklin Bristol BS99 6ZZ
Tel: 0800 923 1533
Secretary
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 Auditors
Gresham House Asset Management Ltd KPMG LLP
5 New Street Square Saltire Court
London EC41 3TW 20 Castle Terrace
0207 3875 9862 Edinburgh EH1 2EG
Registered Number Solicitors
03504214 Dickson Minto
Broadgate Tower
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
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END
FR DXLFBBLLEFBF
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December 03, 2020 12:56 ET (17:56 GMT)
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