22nd Nov 2016 15:47
LONDON (Alliance News) - British Smaller Cos VCT2 PLC on Tuesday said it had continued to make good progress in the third quarter of 2016.
The trust said improved profitability in a number of investments contributed to a GBP1.1 million return from the portfolio in the quarter to the end of September, delivering a GBP1.2 million increase in net asset value prior to the payment of its interim dividend.
British Smaller Cos said that new venture capital trust rules have changed the nature of the businesses it can invest in, and its most recent investments have consisted mainly of equity, rather than yielding debt instruments, which it said is "likely to be the norm going forwards".
The trust said it would expect this to reduce its maintainable level of dividends in the medium-term, compared to the 7% yield it has achieved historically.
"The board will continue to seek to further expand and diversify the portfolio recognising that its composition will change over time as the current portfolio is realised and the newer investments in younger businesses replaces it. As the return profile from these investments is likely to have a greater volatility the board will continue to monitor its dividend and buy-back policies closely through this transition," the trust said in a statement.
Shares in British Smaller Cos VCT2 were untraded Tuesday, last closing at 56.05 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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