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LONDON (Alliance News) - Baronsmead Venture Trust PLC and Baronsmead Second Venture Trust PL both reported having paid "exceptional" dividends which brought down their net asset values in their most recent financial year, due to stricter rules on venture capital trusts holding cash.
Baronsmead Venture Trust reported its net asset value at September 30 stood at 87.09 pence, down from 102.56p at the same date in 2015. However, taking into account 18.5p of dividends in the period, the net asset value per share increased by 3% to 105.59p over the twelve months.
Shares in Baronsmead Venture Trust were down 2.2% at 83.15p on Thursday.
Baronsmead Venture Trust said the "exceptional" dividend level was due to fiscal rules for venture capital trusts penalising the holding of cash, after a period when the trust's realisations exceeded new investments. The trust said it seeks to maintain average annual dividends of 6.5p a share.
During the year the venture capital trust invested GBP4.5 million, which it said was lower than in previous years due to more restrictive rules on venture capital trusts. A total of GBP15.5 million was redeemed via sales and loan note redemptions.
"Given the uncertainty over the timing and terms of the UK's exit from the European Union, it will take time for the impact of Brexit on the UK economy to be known. It is also too early to determine whether there will be any relaxation of VCT investment restrictions that have been heavily influenced by the EU State Aid rules. We are therefore proceeding on the basis that this will not be the case as it is likely to be a number of years before there will be clarity on that matter," said Peter Lawrence, chairman of Baronsmead Venture Trust.
Baronsmead Second Venture Trust PLC reported a net asset value of 92.17p at September 30, compared to 106.46p at January 1, having also paid out exceptional dividends of 17.00p during the nine-month period. Including dividends, its value increased by 2.5% to 109.17p.
Baronsmead Second Venture Trust said its annual dividend policy target is 4.5p.
During the nine-month period the venture trust invested GBP2.0 million and realised GBP8.3 million from existing investments.
Shares in Baronsmead Second Venture Trust were untraded at 87.10p Thursday.
By Adam Clark; adamclark@alliancenews.com
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